Editor's letter: as the UK car market grows, these are the trends to watch
The headline figures suggest an increasingly healthy UK car market
Five months into 2024 and the headline figures suggest an increasingly healthy UK car market. There have been 22 straight months of growth, albeit total sales are still 20% short of pre-Covid levels.
This year, the overall market figure is not the main headline, but rather the proportion of sales that are electric, given the introduction of the ever-popular ZEV mandate and its requirement for 22% of new car sales to be electric this year.
The current run rate for the year is 16.1%, marginally up on the 15.7% market share for EVs at this time last year, although May’s share was higher at 17.6%, suggesting progress is being made.
However, a worrying gap still exists and it shows no sign of being filled. While sales of EVs to fleet buyers continue to grow, sales of EVs to private buyers actually dropped year on year in May, even with healthy incentives being offered by several car makers.
The SMMT, which publishes the monthly data, has renewed its call for incentives to be introduced to stimulate private demand in EVs that car makers are required by legislation to sell.
SMMT boss Mike Hawes said: “Manufacturers can’t sustain this scale of support on their own indefinitely.” He also said halving VAT on the sale of new EVs and cutting VAT on public charging from 20% to 5% would be among measures that would result in more than 250,000 EVs being bought instead of petrol and diesel models over the next three years.
With a general election called for 4 July and no automotive policy statements yet made from any major political party, such support will not seem to be forthcoming any time soon.
If the status quo were to continue, the answer you get about whether or not the 22% target will be achieved this year depends on which car maker you’re speaking to. Ford publicly has said that in order to hit the target, sales of non-EVs will need to be throttled back – a threat also made by Stellantis CEO Carlos Tavares. Most are more tactful, saying they will comply using more conventional means, such as hitting the target this year, deferring to future years, or using credits for ‘over-performance’ in lowering CO2 in previous years.
One car maker with a more extensive range of EVs has told me they are seeing demand from private buyers, yet it’s the ‘newness’ factor of EVs that is driving sales in this part of the market. If you have a fresh new model, a track record in EVs and dealers clued up on how to sell them, then ZEV mandate compliance is achievable.
Such mainstream car makers remain in the minority for now. While the EV percentage of a car maker’s sales is the first port of call on the monthly sales spreadsheet from the SMMT, the figures are also packed full of other interesting snippets and there are fascinating stories emerging wherever you look in sales charts.
BYD is getting a foothold in the UK market. Its 2207 registrations to date are around three times that of Alfa Romeo and just ahead of Polestar (whose sales are down 64% year on year, as it rolls out a new 2 and prepares for the launch of the 3 and 4). Yet BYD’s momentum builds each month and in May it sold more cars than Fiat.
Seat’s market share increase is surprisingly growing faster than Cupra's, and it’s worth noting that Seat still remains a bigger brand in the UK than its younger sibling. Seat has sold 18,155 cars in the UK so far this year to Cupra’s 11,256.
Toyota, Hyundai, Audi, Citroën and Tesla are among the big names to go backwards so far in 2024, none of whom has been able to offer a best-selling model with that ‘newness’ factor so far this year. Expect most to recover.
You have to wince at DS's sales, down 61% on a hardly stellar 2023, and it lags behind GWM Ora and KGM (the new Ssangyong) for sales.
BMW's sales are up and close to 40% this year, and it is the UK's second-largest car brand in 2024 to date. It doesn't work like this, of course, but if you did add Mini's sales to BMW's, then it would be number one ahead of Volkswagen.
Renault is among the other brands flying. Its sales are up 72% year on year, with daylight returning between it and Dacia (Renault has sold 22,582 cars to Dacia’s 13,349) in the process.
The gap created by Ford stopping sales of the Fiesta has opened things up for Renault at that end of the market, and the absence of the Fiesta from Ford’s portfolio has meant its sales have dropped 16% so far this year. Ford now lags behind Audi, BMW, Kia and Volkswagen, with Nissan and its soon-to-arrive revised Qashqai in striking distance.
With talk of holding back sales further in pursuit of ZEV compliance, how times have changed for the Blue Oval in the UK.