UK (Commonwealth) _For the first time in five years, the UK’s automobile sector reports that more than a million new automobiles were sold there in the first half of the year.
However, sales are still significantly below the pre-pandemic year of 2019, and the demand from individual private customers has collapsed due to the crisis in the cost of living, according to data from the Society of Motor Manufacturers and Traders (SMMT).
1,006,763 new automobiles have been registered in the first half of 2024. Despite being 6% more than the previous year, the total is still 20.7% less than 2019 registrants. Year over year growth in the new automobile market was 1.1%.
Only in June did growth occur as a result of businesses purchasing automobiles for their operations. For the seventh consecutive month, non-corporate retail demand declined while fleet purchases increased by 14.2%. Just four out of every ten new registrations last month were related to retail transactions.
According to the SMMT, private customers registered 67,625 new automobiles in June, a 15.3% decrease from 79,798 in the same month the previous year.
Amidst a challenging economic environment, the private consumer market is still contracting. However, SMMT CEO Mike Hawes stated that the future government has the ability to revitalize the sector and expedite a more equitable transition to zero emissions by implementing the appropriate policies.
Electric cars
By the end of this year, electric cars (EVs) must account for twenty-two percent of sales for UK automakers.
The percentage of automobiles that are electric (as opposed to hybrid or plug-in hybrid vehicles) has stayed at 16% in 2024, indicating that automakers may be subject to financial penalties if the legal requirement is not met.
The industry association claims that in order for manufacturers to fulfill the 22% target, they must acquire electric fleet cars, as seen by the numbers released on Thursday. Hybrid vehicles are now more popular than solely battery-powered vehicles, accounting for 36.5% of all new registrations.
All sides agree that reducing carbon emissions is imperative, and according to Mr. Hawes, the first step toward accomplishing this goal is swapping out outdated fossil fuel-based technology with modern electric powertrains.
The Society of Motor Manufacturers and Traders (SMMT) reports that new automobile registrations increased 1.1% in June to 179,263 units, or 1,006,763 new cars registered so far this year. While this is up 6% from the previous year, it is still down 20.7% from 2019.
Strong rise was seen in the sales of electrified cars; hybrid electric vehicle sales increased by 12.1%, but they still had a somewhat lesser market share of 12.7%. Plug-in hybrids saw the biggest increase in market share during the month, increasing by 29.1% to take up 7.2%. Additionally, battery electric vehicles (BEVs) increased at a faster rate than the overall market, gaining 21.8% to represent 17.7% of registrations.
The SMMT stated that March, the strongest month for auto sales, will provide a clearer long-term picture. Thanks to financial incentives, fleets are the only ones driving the uptake of EVs; fewer than one-fifth (18.2%) of new BEVs sold this year have gone to individual purchasers.
Concerns over the price of electric cars, the durability of their batteries, and the accessibility of charging stations are common among buyers. Last month, a House of Lords committee recommended that authorities step in to support the used electric vehicle (EV) industry and alleviate “uncertainty and concerns” regarding the condition of the vehicles’ batteries.
The government was encouraged to increase efforts to promote the use of electric vehicles by peers on the environment and climate change committee. A speedier shift, according to the SMMT, hinged on more private purchasers making the move, but many were being prevented from doing so by the absence of meaningful incentives.
The budget on Wednesday presented the chancellor with an opportunity to boost demand by lowering the three-year VAT on new electric vehicles, revising the proposed adjustments to vehicle excise duties, and bringing down the VAT on public charging to match that on home charging.
Private EV customers pay the entire 20% VAT imposed on all automobiles, whether they are electric, gasoline, or diesel. In contrast, consumers do not pay VAT on other emission-reduction devices like heat pumps and solar panels.
