Industry data has revealed that for the first time since the pandemic began, one million cars have been sold in the first half of a year. However, these figures are still significantly lower than pre-pandemic sales in 2019, with individual private buyers scaling back their demand due to a cost of living crisis.
According to the Society of Motor Manufacturers and Traders (SMMT), a total of 1,006,763 new cars were registered in the first six months of 2024. While this number represents a 6% increase from the previous year, it is still down by 20.7% compared to 2019 registrations. The overall new car market experienced a modest growth of 1.1% year-on-year.
The only reason for this growth in June was due to corporate purchases, with fleet purchases rising by 14.2%. In contrast, non-corporate retail demand continued to decline for the ninth consecutive month, with retail sales accounting for only four out of 10 new registrations last month.
SMMT chief executive Mike Hawes stated that “the private consumer market continues to shrink against a difficult economic backdrop, but with the right policies in place, the next government can re-energise the market and deliver a faster, fairer zero-emission transition.”
One of the key factors impacting the market is the UK’s legal mandate for carmakers to have electric vehicles (EV) make up 22% of sales by this year. However, the uptake of fully electric cars has remained at 16% so far in 2024, suggesting that carmakers may face financial penalties for not meeting the target.
In addition, the reliance on fleet purchases to meet EV sales targets is evident, with the SMMT noting that the ability for manufacturers to reach the 22% target is heavily dependent on these purchases. Hybrid vehicles, which make up a combined 36.5% of new registrations, have seen strong uptake in comparison to fully electric cars.
Despite the challenges faced by the industry, Mr Hawes believes that “all parties are agreed on the need to cut carbon and replacing older fossil fuel-based technologies with new electrified powertrains is the essential step to achieving that goal.”
