New car market in UK up 2.6 per cent in 2024, figures reveal
The UK’s new car market recorded its second successive year of growth with a 2.6 per cent rise in registrations in 2024, new figures show.
Industry body the Society of Motor Manufacturers and Traders (SMMT) said around 1,953,000 new cars were registered last year, compared with 1,903,000 in 2023.
Growth was delivered entirely by purchases for fleets owned or leased by businesses or other organisations, which were up 11.8 per cent.
However, demand from private buyers fell by 8.7 per cent to around 746,000 units.
That was below the level seen in 2020, when coronavirus pandemic-related restrictions shut down the market for three months.
Total uptake by businesses running no more than 25 vehicles fell by 3.1 per cent to around 43,000 units.
SMMT chief executive Mike Hawes said private buyer demand is “still very, very weak”.
He claimed many consumers felt there was “every reason” to hold off making a purchase because of the “economic backdrop” and “confusion about what type of vehicle to buy” caused by mixed messages from governments over the last two years.
Labour has committed to reverse Rishi Sunak’s decision in September 2023 to delay prohibiting the sale of conventionally fuelled new cars and vans from 2030 until 2035.
Pure battery electric new cars made up 19.6 per cent of the new car market in 2024, with around 382,000 units.
Under the government’s zero emission vehicles (ZEV) mandate, car-makers were required to ensure 22 per cent of their sales were pure electric last year.
The target rises each year, such as to 28 per cent for 2025.
Failure to reach the required level will result in a £15,000 fine per polluting car sold above the limit, but manufacturers can avoid penalties by using flexibilities, such as taking into account their sale of large numbers of low-emission petrol and diesel cars.
The Department for Transport (DfT) said it expects the flexibilities mean “all manufacturers will meet their targets for 2024”.
The SMMT said only one in 10 private buyers chose an electric vehicle (EV) in 2024.
But EV lobbyists noted this does not include employees who purchased cars through salary sacrifice schemes to benefit from government financial incentives.
Petrol remained the most popular type of new car among private buyers, with a market share of 61.0 per cent.
Hawes said EV mandates “don’t compel the demand, and do not, by themselves, create the market”.
He warned manufacturers are discounting EVs by large amounts in a bid to avoid “punitive” ZEV mandate fines, and stressed the need for an ongoing government consultation on the transition to electric motoring to result in increased support for consumers.
Hawes added: “A record year for EV registrations underscores vehicle manufacturers’ unswerving commitment to a decarbonised new car market, with more choice, better range and increased affordability than ever before.
“This has come at huge cost, however, with the billions invested in new models being supplemented by generous incentives which are unsustainable.
“We need rapid results from the regulatory review and urgent substantive support for consumers – else automotive investments will be at risk and the jobs, economic growth and net zero ambitions we all share in jeopardy.”
In November, Vauxhall owner Stellantis announced the closure of its van-making factory in Luton, putting 1,100 jobs at risk, and said the decision was made within the context of the “stringent” ZEV mandate, which also applies to new van sales.
Ian Plummer, commercial director at online vehicle marketplace Auto Trader, said: “New car sales still sit significantly behind pre-Covid levels, and with supply outstripping demand, 2024 certainly wasn’t an easy year for most manufacturers or retailers.
“Even though electric car sales accounted for around a fifth of the total 2024 sales – not far off the government target – hitting the next target of 28 per cent by the end of this year will be incredibly challenging.”
Dan Caesar, chief executive of lobby group EVUK, said: “We were told that consumers don’t want EVs but these regular record figures now tell a different story.
“EVUK sees that private buyers are buying new EVs but the registration figures are blended with fleet sales, which distorts the data.”
Hawes insisted that adding salary sacrifice purchases to the total for private sales would not generate “a substantially better picture”.
The overall figures are based on preliminary data. Confirmed totals will be published at 9am on Monday.
A DfT spokesperson said: “Thanks to the flexibilities in the ZEV Mandate, we’re confident the whole market has complied with the 22 per cent target and that no car manufacturer will need to pay fines.
“We’ve invested over £2.3bn to support industry and consumers to make the switch, rolled out more than 72,000 public chargers, and launched a consultation to invite the sector to shape how we achieve the transition to ZEVs.
“Getting this transition right as more people make a switch to electric vehicles will support the growth of the market in the UK and will provide an opportunity to tap into a multibillion-pound industry that will create high paid jobs for decades to come.”
Press Association – Neil Lancefield