UK new car registrations reached 156,737 units in May, representing an almost eightfold increase on the same month last year, but down 14.7% on pre-pandemic May 2019.
This is according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), which found that uptake was in line with the most recent industry outlook, published in April, which sees the sector anticipating around 1.86m registrations by the end of the year.
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Fleet registrations grew twice as fast as private purchases in the month, with large fleets accounting for 50.7% of all new vehicles being sold, demonstrating improving business confidence in the market.
Battery electric vehicles (BEVs) saw their market share decline from 12% a year ago to 8.4% in May this year. However last year’s performance was distorted by lockdowns when new cars could only be purchased through Click and Collect or delivery.
Plug-in vehicles now comprise 13.8% of new car registrations, up from 7.2% a year earlier, with the most rapid growth seen in plug-in hybrid (PHEV) space. Pure petrol and mild-hybrid petrol cars so far account for 60.4% of registrations, while pure diesel and mild hybrid diesels took an 18% share year to date, compared to 64.6% and 22.4% last year.
“With dealerships back open and a brighter, sunnier economic outlook, May’s registrations are as good as could reasonably be expected,” said Mike Hawes, chief executive of the SMMT. “Increased business confidence is driving the recovery, something that needs to be maintained and translated in private consumer demand as the economy emerges from pandemic support measures.
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By GlobalData“Demand for electrified vehicles is helping encourage people into showrooms, but for these technologies to surpass their fossil-fuelled equivalents, a long-term strategy for market transition and infrastructure investment is required.”
Industry reaction
Sue Robinson, chief executive of the NFDA, said: “In May, vehicle sales continued to benefit from the pent-up demand accumulated when showrooms were closed; footfall levels and volumes of enquiries alike are now beginning to increase following the reopening of dealerships.
“Sales of new electric vehicles performed well and it is encouraging to see that plug-in vehicles now account for 13.8% of all new car sales; demand for used and nearly new cars remains buoyant too.
“The outlook for the industry remains positive, consumer confidence is rising and with the economy performing better than expected, dealers are optimistic about the months ahead although tightness in supply may affect registrations of new cars over the summer.”
Seán Kemple, managing director of Close Brothers Motor Finance, said: “Severe supply issues caused by Covid-19, Brexit, and now a global semiconductor shortage are choking the new car market, causing long delays and slow delivery times for new orders.
“This is pushing people toward the used car market instead. With demand for car ownership rocketing, largely prompted by a reticence to take public transport post-Covid, and many people emerging from the lockdown with increased savings, opting for a used car may be the more accessible and convenient option for buyers.
“With registrations of alternative fuelled vehicles (AFVs) now making up a sizeable 41.8% of the market while diesel’s market share falls rapidly, the dial is turning. But there is a lot more work to do – it’s now down to infrastructure to keep up, accommodating electrified roads with more charging points and EV-parking spaces.”
Catherine Faiers, chief operating officer at Auto Trader, said: “The industry does have significant supply challenges at the moment which is symptomatic of exceptional demand levels and also chip shortages impacting new car supply globally. The supply constraints for new cars are, understandably, impacting used car supply and pricing. As many consumers are having to move on to used cars if they can’t find the model they desire new.
“Encouragingly, despite the limited supply of some models, May saw a record number of new car leads to retailers generated through Auto Trader, up 19% month-on-month and up 81% in comparison to May 2019. So, demand is most definitely there and whilst the market still has its challenges, overall this is a positive for the automotive industry given the obstacles of the last year and the various lockdowns.”
Karen Hilton, chief commercial officer at heycar, said: “If you’re in the market to sell, now is a great time. A shortage of the stock that usually moves around and makes its way to dealerships, such as ex-contract vehicles, fleet cars and ex-rentals, means that used cars are commanding a premium and selling fast.
“This has also come at a time when there are clear challenges around the availability of some new vehicles, due to many manufacturers still getting back up to speed following enforced Covid shutdowns. So used cars are not only selling quickly, the low supply means dealers can maximise their margins at this time.”
James Fairclough, chief executive of AA Cars, said: “With lockdown restrictions set to be eased even further in late June, many prospective buyers will be keen to choose a vehicle that will enable them to enjoy a summer staycation in the UK, or just to travel to see family and friends across the country.
“It may take some time for sales of new cars to return to their pre-pandemic levels, as many drivers continue to be drawn primarily to the used market, which offers affordable price points and plenty of choices.”
Meryem Brassington, electrification propositions lead at Lex Autolease, said: “Today’s continued rise in EV registrations shows the significant progress we’re making along the Road to Zero, with figures up 822% compared with the same period last year. This is particularly encouraging given the BEV supply chain challenges the industry is currently facing, and the recent changes to plug-in grants.
“However, the figures mask a worrying trend. There were more than 376,000 fewer new car registrations in the five months to May than in the same period of 2017. That’s 376,000 cars on the road today that are older and less efficient. If replacement cycles are extended further by businesses reconsidering their fleet mileage as Zoom meetings replace face-to-face, this could seriously offset the gains made by the growth in EV adoption.”
