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UK's New Car Market Achieves Two Years Of Growth As BEV Sales Surge
The UK new car market saw a 2.5% rise in July, marking 24 months of continuous growth, according to the Society of Motor Manufacturers and Traders (SMMT). With 147,517 new cars registered, it was the best July performance since 2020, when dealerships reopened after lockdowns.
Electrified vehicles outpaced the overall market, making up 42% of new registrations. Hybrid electric vehicles (HEVs) rose by 31.4%, capturing a 14.5% market share. Plug-in hybrids (PHEVs) increased by 12.4%, reaching an 8.9% share. Battery electric vehicles (BEVs) grew by 18.8%, holding an 18.5% market share.
The fleet sector sustained July's growth with a 13% increase in registrations, achieving a 62% market share. In contrast, private demand fell by 11.1%, accounting for only 36.2% of deliveries. The rising popularity of salary sacrifice schemes has contributed to this decline in private purchases.
Despite the rise in BEV volumes, private BEV sales dropped to 17.2%, down from last year's 20.3%. However, private BEV volumes did see a slight increase of 0.9%. Overall, BEVs account for 16.8% of the new car market year-to-date.
The latest industry outlook has adjusted expectations downward for the year, forecasting 1.968 million new car registrations by year-end, with BEVs expected to make up 18.5% of this total. This is a reduction from April's forecast of a 19.8% BEV share.
SMMT Chief Executive Mike Hawes commented on the situation: "Two years of new car market growth against a backdrop of a turbulent economy is testament to the sector’s resilience and the attractiveness of the deals on offer." He added that weakening private retail demand for EVs remains a significant concern despite generous manufacturer discounts.
Economic Contributions
The automotive industry is crucial to the UK economy, contributing £93 billion in turnover and £22 billion in value added annually while investing around £4 billion each year in research and development (R&D). The sector employs approximately 198,000 people directly in manufacturing and around 813,000 across the wider industry.
The industry also supports jobs in other sectors such as advertising, chemicals, finance, logistics, and steel. Wages in automotive manufacturing are about 13% higher than the UK average.
Global Trade Impact
The UK automotive sector accounts for 12% of total UK exports of goods, with over 140 countries importing UK-produced vehicles. This generates £115 billion in total automotive trade imports and exports annually.
The UK manufactures nearly every type of vehicle including cars, vans, taxis, trucks, buses, coaches, specialist vehicles and off-highway vehicles supported by over 2,500 component providers and some of the world's most skilled engineers.
Future Challenges
With zero-emission vehicles mandated to comprise at least 22% of each brand’s new car registrations over the full year, there is pressure to accelerate this transition significantly to meet climate change goals and regulatory targets.
Hawes emphasised that more support for consumers is needed: "More people than ever are buying and driving EVs but we still need the pace of change to quicken." He called for action on incentives and infrastructure as September's important new numberplate month approaches.
SMMT provides detailed insights into the automotive industry's impact through its Motor Industry Facts publication available at www.smmt.co.uk/reports/smmt-motor-industry-facts/. For media inquiries or expert commentary from SMMT representatives like Paul Mauerhoff or James Boley among others can be contacted directly via their provided details.
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