UK vehicle markets back on track
A slew of data out this week gives renewed optimism that vehicle markets are getting back on track. For the first time, new car registrations were above pre-pandemic levels with October 7.2% up. Light commercial vehicle registrations also pushed above 2019 volumes, and the used car market recorded its third successive quarter of growth with almost 1.9 million pre-loved motors changing hands.
While the economic backdrop is challenging and will increasingly affect consumer confidence, the latest SMMT outlook has been revised upwards. Overall new car registrations are anticipated to reach 1.886 million by the end of the year, a rise of 2.1% on July’s expectations, which is undoubtedly good news, and the 2024 market expected to rise by a further 1%.
Growth was also seen in electrified vehicle uptake, with BEV registrations up for the 42nd month in a row – driven predominantly by company buyers. Less encouraging, however, was the continued decline in private consumer demand, underscoring the need for measures to give new private retail buyers confidence to make the switch. This is essential if we’re to increase supply into the used market where there is clear demand for BEVs at perhaps more affordable prices. Indeed, in the last quarter we saw second and third hand BEV transactions almost double and reach a record market share of 1.3%.
However, with the Zero Emission Vehicle Mandate looming, the pressure is on to grow BEV demand still further. It is concerning, therefore, that the outlook for BEV uptake has been downgraded slightly, by -1.7% to 324,000 units which would result in a market share at year end of 17.2%, some way below the 22% brands must deliver for 2024.
We must accelerate the EV transition and government can help facilitate that shift with incentives for consumers, something to which we will look to the chancellor and his forthcoming Autumn Statement. Ahead of that, however, another automotive technological shift that received a boost this week was in the area of connected and automated mobility. The industry welcomed the introduction of the Automated Vehicles Bill this week, as it will help position the UK as a leader in the roll out of self-driving vehicles.
Manufacturers and developers are investing billions in this cutting-edge tech and the Bill will help us move from trial to deployment, essential if we are to the deliver the jobs, growth, road safety and increased business efficiency that connected and automated mobility offers.
This week also saw SMMT host a delegation from Germany comprising our sister association, the VDA, the German Business Ministry BMWK, officials from DBT, and OEMs and suppliers with a vested interest in UK-Germany automotive trade. Through a series of discussions and meetings, shared issues of concern and opportunity were raised, from supply chain compliance to decarbonisation policy and, of course, Rules of Origin.
The UK is an important market for the German automotive industry, as is Germany for the UK, so it was hugely encouraging to share perspectives and collaborate on strategies that will help ensure both industries are prosperous. Building on our international engagement, SMMT launched its 2024 calendar of overseas events during the week’s International Trade Week, with an India visit in January now open for bookings. Contact the international team here for more information.
Finally, there are now less than two weeks until the 106th SMMT Annual Dinner on Tuesday 28 November. There are very limited places remaining and I am delighted to say that the Rt Hon Rory Stewart OBE will be the after-dinner speaker for this year’s event. Before serving as a cabinet minister, and making a widely-praised contribution to the Conservative Party leadership contest, Rory governed two Iraqi provinces, set up a charity, trekked across Afghanistan, and lectured at Harvard. Together with Alastair Campbell, he hosts the podcasts The Rest is Politics and Leading. Given the forthcoming General Election, I am sure his insights will be relevant, perceptive and, of course, will be laced with humour. Book your Dinner tickets here.
