UK (Commonwealth) _ New car registration in the UK has increased by roughly 18.6% in 2023. The Society of Motor Manufacturers and Traders (SMMT), further estimates around 1.9 million new cars were registered, last year.
The SMMT’s chief executive, Mike Hawes, called the gain “a very positive result,” especially given during the “relatively negative economic backdrop.” The increase beginning in 2022 was completely driven by enterprises investing in large fleets (increasing 38.7% year on year), with private consumer demand staying flat at roughly 818,000 units.
Mr. Hawes said the lack of growth in private registrations was “no surprise” due to rising living and interest costs. Despite the year-on-year increase, the overall new automobile market was 17.7% lower than before the epidemic.
Mr Hawes believes that demand for new automobiles will not return to pre-virus levels, owing in part to shifting work habits that result in less commuting. Battery electric new car sales hit a record high of 315,000 units last year, while their market share remained unchanged from the previous year, at 16.5%.
Volumes declined by 34.5% in December 2023, however the SMMT attributed this to an “abnormal” December 2022, when many orders were completed. The SMMT urged the government to reduce VAT on new electric car purchases by private buyers to 10% for three years. According to the organization, such a change would increase demand by lowering prices by roughly £4,000 on average. This would be similar to the tax breaks provided to fleets acquiring new electric vehicles.
According to the SMMT, the strategy would result in an additional 250,000 battery electric new cars on the road over the next three years. Only one in every eleven private UK consumers who purchased a new car last year chose a battery electric model. Mr. Hawes stated that the UK’s market share for those vehicles was “probably in the bottom half of Europe,” trailing France, Germany, Ireland, and Portugal. He blamed it on a lack of incentives in the UK.
A plan that allowed consumers who bought new electric cars to receive incentives of up to £1,500 per was phased down in June 2022. Mr. Hawes stated that as vehicle supply issues fade, the new car market is rebounding with its greatest year since the epidemic.
The objective for 2024 is to achieve a green recovery, fueled by fleet investment, particularly in the most recent EVs (electric cars). The government has set the world’s most ambitious transition timeline for the automotive sector and is spending to ensure the UK is a leading producer of electric vehicles. It must now assist all drivers in purchasing into this future by providing consumer incentives that will position the UK as the top European market for ZEVs (zero-emission vehicles).
According to the ZEV mandate, at least 22% of new cars produced in the UK this year by each manufacturer are required to be zero-emission, which typically means battery EVs. The criterion will be raised on an annual basis until it reaches 100% by 2035. Manufacturers who fail to comply with the law or utilize flexibilities, such as carrying over allowances from past years, will be fined £15,000 every polluting vehicle sold above the restrictions.
Mr. Hawes projected that because the plan was adaptable in its first three years, the majority of automobile manufacturers would avoid penalties during that time. According to the SMMT, the number of new automobiles registered in the UK in 2024 will be 1.97 million.
Nusrat Ghani, Minister of Industry, stated that the new results show a tremendous start to 2024 for our world-class automobile business, in what promises to be an excellent year ahead for the UK vehicle market, building on the major investment victories delivered in 2023. We’re relying on our car industry’s long-term success, and it’s encouraging to see such strong belief in UK automotive and the EV sector, especially as we accelerate our move to zero-emission vehicles.
