New UK car sales exceed 1 million for first time since the pandemic
Car sales statistics for new UK car sales exceed 1 million in the first half of 2024. The first time this has happened since the pandemic, providing optimism for the car market.
Business and Fleet Sales
According to the Society of Motor Manufacturers and Traders (SMMT) new car sales in the UK were up 6% in the first half of 2024 to just over 1m, compared to 949,000 in the same period last year with all of this growth coming from an increase in business and fleet sales.
Mike Hawes, SMMT CEO, said while the overall numbers are good for the industry, the demand hasn’t come from private buyers. “Businesses and fleets are the ones buying the new models and taking advantage of the deals for big volume purchases.”
Private Sales
For private buyers, high inflation and rising interest rates have made car finance more expensive. The majority of private car sales in the UK are financed which has led to a fall in private sales of 12% in the first half of 2024 compared to the same period last year. Furthermore, June 2024 was also the ninth consecutive month of private car sales declining.
Due to these economic circumstances, car manufacturers are currently very reliant on business and fleet sales for their new cars rather than private sales.
Electric Vehicles complicating the market
Complicating the market is the rise of electric vehicles (EVs). June 2024 saw the share of electric car sales at 19%, the highest this year. Whilst zero-emission are essential for environmental targets, it’s a challenge for manufacturers and consumers alike.
European carmakers are struggling to find buyers for their EVs which are often more expensive than their petrol or diesel counterparts. The pricing issue combined with the Zero Emission Vehicle (ZEV) mandate has caused tensions in the industry. Stellantis, the parent company of Vauxhall, Peugeot and Fiat has threatened to close its UK factories if the mandate’s conditions are impossible to meet.
New Car Sales Outlook
Looking forward, new car sales in the UK are uncertain. The SMMT expects annual sales to reach 2m for the first time since 2019. But that’s still below pre-pandemic levels.
The industry has several challenges to overcome, for example, stabilising EV demand and private buyer finance. EVs are now out of the infancy stage and the challenge for manufacturers is to move EVs into the mass market, which is key to sustainable growth in the sector.
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