The UK automotive industry experienced a welcomed uptick in new car sales during the month of May, primarily driven by robust demand from fleet and business sectors, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT). The data revealed a 1.7% year-on-year increase in new car registrations, with 147,678 units hitting the roads, marking the best May market performance since 2021.
However, the overall figures remained approximately 20% below the pre-pandemic levels of 2019, highlighting the industry’s ongoing challenges in recovering from the impacts of COVID-19 and navigating the current economic landscape.
Despite the overall positive trend, the SMMT noted a notable drop in private consumer purchases, reflecting the strain of the cost-of-living crisis on household budgets. This decline in private retail uptake was narrowly offset by the sustained demand from fleet and business segments, which continued to fuel market growth.
The uptake of battery electric vehicles (BEVs) remained a focal point, with these zero-emission models claiming a 17.6% market share, up from 16.9% a year earlier. However, this figure fell short of the government’s target of 22% as set out in the zero-emission vehicle mandate, underscoring the need for additional support measures to accelerate the transition to electric mobility.
In response to the challenges faced by consumers, manufacturers have been offering a range of compelling discounts and incentives to stimulate demand for electric vehicles (EVs). However, the SMMT emphasized the need for further government support, such as temporarily halving value-added tax (VAT) on BEVs, to encourage more buyers during this economically challenging period.
“With a choice of more than 100 EV models now available, and a raft of compelling offers, manufacturers are dedicated to driving change, but meeting targets will require more support,” the SMMT stated.
Jamie Hamilton, the automotive partner and head of electric vehicles at Deloitte, echoed the industry’s concerns, highlighting the need for a more comprehensive charging infrastructure to make EVs a viable option for consumers. “Currently, electric vehicles don’t appear to make sense for consumers, unless they can charge their cars at home overnight. As a result, there does need to be a push on creating more publicly available charging stations,” Hamilton said.
Despite the challenges, the automotive industry remains committed to the transition towards electrification and sustainable mobility. The SMMT’s data underscores the resilience of the UK market, with fleet and business demand playing a crucial role in sustaining growth amidst ongoing economic headwinds.
As the industry navigates this transition, collaboration between manufacturers, policymakers, and stakeholders will be essential to address consumer concerns, enhance infrastructure, and provide the necessary incentives to accelerate the adoption of electric vehicles in the UK.