SMMT upgrades new car outlook after ninth consecutive month of growth

SMMT upgrades new car outlook after ninth consecutive month of growth

Time Stamp: May 4, 2023 4:45 AM
Source Node: 2627698

The UK new car market grew by 11.6% in April and the Society of Motor Manufacturers and Traders (SMMT) has now revised its 2023 outlook to a predicted 1.83 million vehicles.

April’s performance added 132,990 new car registrations and was the best result since April 2021, but remains 17.4% down on 2019 volumes.

Large fleet registrations are continuing to drive the new car market forward, with 33.1% and 39% growth respectively in April and the year-to-date. The SMMT said this is a result of the fleet market naturalising following weaker volumes last year.

Meanwhile, the retail market dropped by 5.5% to 61,342 units in April and levelled out year-to-date with a smaller drop of 0.9% to 289,595 units.

Battery electric vehicles (BEVs) remained the second most popular fuel type, with deliveries up by more than half to 20,522 and 15.4% of the market.

Plug-in hybrid vehicles (PHEVs) also posted strong growth, up 33.3% with 8,595 registered in the month, while hybrid electric vehicles (HEVs) recorded a 7.7% increase to 15,026 units.

As a result, electrified vehicles accounted for more than one in three registrations in April.

Petrol-powered cars retained their best-selling status, comprising 58.1% of all registrations.

Supply chain pressures begin to ease

As supply chain pressures have begun to ease, the overall market is now up 16.9% in the first four months – the best start to a year since the pandemic, with growth worth £3.2 billion.

This has led to an upward revision of the quarterly market outlook, the first positive revision since 2021, with 1.83 million new car registrations expected in 2023, up from 1.79m anticipated in January.

That puts expected market growth this year at 13.5%, which would be the best percentage gain since 1983.

The sector is, however, less optimistic about growth in demand for BEVs, downgrading their expected 2023 market share from 19.7% to 18.4%, with high energy costs and insufficient charging infrastructure anticipated to soften demand. 

The latest outlook for 2024, meanwhile, suggests that 22.6% of new car registrations will be BEVs, a downward revision from the 23.3% forecast in January.

With a zero emission vehicle mandate due to come into effect next year, the SMMT has urged greater and faster investment in infrastructure, and more incentives to encourage purchase are essential to drive consumer confidence and accelerate uptake.

Mike Hawes, SMMT chief executive, said: “The new car market is increasingly bullish, as easing supply chain pressures provide a much-needed boost. 

“However, the broader economic conditions and chargepoint anxiety are beginning to cast a cloud over the market’s eagerness to adopt zero emission mobility at the scale and pace needed.

“To ensure all drivers can benefit from electric vehicles, we need everyone – government, local authorities, energy companies and charging providers – to accelerate their investment in the transition and bolster consumer confidence in making the switch.”

Industry reaction

Ian Plummer, commercial director at Auto Trader, said the positive performance for new cars over the last nine months represents a healthier economic picture than feared a few months back.

He said: “This new car performance is good for the market and consumer demand is strong with over 77 million visits to the Auto Trader platform last month alone. 

“But the softening of the SMMT’s forecasts on EV sales offers some cause for concern and underlines our recent call for measures needed to support the EV market, such as cutting VAT on public chargers. Hopefully ChargeUK’s new plans to invest £6bn in charging infrastructure will also help the cause of the transition to electric vehicles.”

Time Stamp:

More from AM Online