UK New Car Market Continues To Grow With Fleet Support

New Car Registrations in the UK Continue to Grow for the 22nd Consecutive MonthThe UK new car market has experienced its 22nd consecutive month of growth, with registrations rising by 1.7% in May, according to the Society of Motor Manufacturers and Traders (SMMT). This performance marks the best May market performance since 2021, although it remains down by -19.6% compared to 2019.Fleets and businesses have been the driving force behind this growth, with a 14.0% increase and a 9.5% increase respectively. This has offset the -12.9% decline in private retail uptake. While deliveries of petrol and diesel cars have fallen, there has been an increase in demand for electrified vehicles. Plug-in hybrids (PHEVs) have recorded the highest growth among all powertrains, with a 31.5% increase and an 8.0% market share. Hybrids (HEVs) have also seen a rise of 9.6%, maintaining their position as the third most popular fuel type after petrol and battery electric vehicles (BEVs), which hold a 13.2% market share.The market share for BEVs has increased to 17.6% in May, up from 16.9% in the same month last year. The fleet sector has been the main driver of this growth, with volumes rising by 10.7%. However, private retail BEV uptake has fallen by 2.0%, just short of May last year's figures.Despite this encouraging performance, manufacturers are still falling short of the trajectory mandated by the government's Vehicle Emissions Trading Scheme, which requires each brand to sell 22% zero-emission vehicles this year. To meet these targets, manufacturers need more support as manufacturer discounting cannot be sustained indefinitely.The SMMT Chief Executive, Mike Hawes, has emphasized the need for the next government to provide private consumers with meaningful purchase incentives. While some private buyers can access benefits through salary sacrifice schemes, universal access to incentives would significantly increase BEV uptake and accelerate the decarbonization of road transport. Hawes suggests temporarily halving VAT on new BEV purchases and reducing the VAT on public charging from 20% to 5% to drive up demand.The UK automotive industry is a vital part of the country's economy, contributing £78 billion in turnover and £16 billion in value added. It typically invests around £3 billion each year in research and development. With over 208,000 people employed in automotive manufacturing and 800,000 across the wider sector, the industry plays a crucial role in supporting the agendas for levelling up, net zero emissions, advancing global Britain, and economic growth.In conclusion, the UK new car market has shown consistent growth for the 22nd consecutive month. While there has been a decline in petrol and diesel car sales, there has been an increase in demand for electrified vehicles. However, manufacturers need more support to meet government targets for zero-emission vehicles. The next government must provide private consumers with meaningful purchase incentives to drive up demand for battery electric vehicles and accelerate the decarbonization of road transport.For more information, please visit the Society of Motor Manufacturers and Traders (SMMT) website.Sources:- SMMT: https://www.smmt.co.uk/- Auto Trader: https://www.autotraderroadto2035.co.uk/- SMMT Motor Industry Facts: www.smmt.co.uk/reports/smmt-motor-industry-facts/