The UK new car market rose 1.2% in August, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). The growth, albeit marginal, is the first seen since February, with some 68,858 new vehicles hitting the road in what is usually the quietest second month of the year as many buyers choose to wait for a “new” license plate in September.

Despite the growth, August volumes were still the weakest of the month, with the exception of 2021, since 2013, as supply chain pressures continued to constrain the market.1 Registrations of large fleets fell by -1.6%, offset however by a 3.2% increase in deliveries to individuals. Professional clients saw the biggest increase of 26.6%, but the sector is small in volume and prone to volatility.

Overall growth for the month was mainly driven by battery electric vehicles (BEVs), which recorded a 35.4% increase in volumes and a 14.5% market share. However, growth in this segment is slowing, with a year-to-date increase of 48.8%, while at the end of the first quarter, BEV registrations were up 101.9%.

Plug-in Hybrid (PHEV) registrations fell -23.1% to represent 5.6% of monthly registrations. As a result, plug-in vehicles accounted for one in five registrations (20.2%) in August. Registrations of hybrid electric vehicles remained relatively stable, down -0.7%.

City cars remained the most popular vehicle class, increasing their market share to 34.0%, with 7.4% more delivered to customers than in August 2021. luxury and lower mid-range vehicles also recorded growth of 31.0%, 1.5% and 1.3%. % respectively, while registrations in all other segments declined.

Since the beginning of the year, registrations are down -10.7% compared to last year at 983,099 units – more than a third (-35.3%) less than in the past first eight months of the pre-pandemic year 2019 – demonstrating the scale of the challenge ahead in terms of recovery. 2

Mike Hawes, Managing Director of SMMT, said: “New car market growth in August is welcome, but marginal in a low volume month. Soaring energy costs and inflation, in addition to ongoing supply chain challenges, are putting even greater pressure on the automotive industry’s post-pandemic recovery, and we have a urgent need for the new Prime Minister to meet these challenges and restore confidence and sustainable growth. With September traditionally a bumper time for new car adoption, next month will be the true barometer of the industry’s recovery as it accelerates the transition to zero-emission mobility despite myriad challenges.

Jon Lawes, Managing Director, Novuna Vehicle Solutions“These figures illustrate the persistence of supply constraints in the market, which are reflected in modest sales growth. However, demand for electric vehicles remains relatively robust, despite extended delivery times which we expect will continue into 2023.

“Despite the discouragement of the new Conservative leader, it is crucial that we see firm and swift action to support the automotive sector at all levels, including significant new investment in public charging infrastructure and incentives for drivers to accelerate the transition to zero-emission mobility by 2030. We urge new leaders to maintain favorable tax incentives that have been successful in driving electric vehicle adoption to date, such as wage sacrifice, while dedicating resources to improving charging infrastructure, which remains a barrier for millions of motorists looking to transition to an EV with confidence.

Jamie Hamilton, Automotive Partner and Head of Electric Vehicles at Deloitte, said: “New car registrations rose 1.2% in August compared to the same period last year. While it is promising to see growth for the first time since February, this growth is coming from a weak base. With just 68,858 cars sold last month, year-to-date figures remain well below pre-pandemic figures.

September’s plate change is hugely significant, but unlikely to provide respite

“The industry is hoping the new ’72’ plate will help boost fortunes next month. But, with year-to-date sales down -10.7% from last year, it It would take a bumper month to help the industry recoup any shortfall from the rest of the year.Any expectation of September’s performance should be tempered given ongoing supply constraints.

Dealers sheltered from the cost of living crisis…for now

“The growing pressure on the cost of living has caused consumer confidence to fall to an all-time low. Overall, consumers are tightening their belts, with many delaying major purchases. However, the pent-up demand that has increased during the current semiconductor shortage means that order books are full through the end of the year. As a result, many dealerships will be insulated from a drop in demand in the short term. Any fallout from the cost of living crisis is more likely to be felt next year, with some concerns already being expressed about a slowdown in demand in 2023.

Challenges for Dealers and OEMs

“Like the rest of the country, dealerships and automakers are feeling the effects of rising costs, especially energy bills, as one of the additional challenges they face.

The growth of electric vehicles continues

“Despite ongoing industry challenges, battery electric vehicles continue to grow in popularity; volumes increased by 35.4% in August compared to the same period last year, representing a market share of 14.5%.

“This may be explained, in part, by the fact that some manufacturers are prioritizing the production of battery electric vehicles, as the supply of semiconductors remains limited.

“Over the past few months, record fuel prices have encouraged some consumers to consider going all-electric. As fuel prices begin to fall and the cost of electricity rises, some consumers may begin to worry. question the financial benefits of switching to an electric vehicle.However, if the cost of charging an electric vehicle at home were to almost double – as expected in October due to rising energy prices – drivers of electric vehicles will still achieve substantial savings compared to those who refuel a petrol or diesel car.

Meryem Brassington, Head of Electrification Proposals at Lex Autolease, commented: “While August has traditionally been a quieter month for registrations, it is encouraging to see that electric vehicles continue to make significant inroads into the new car market, despite ongoing supply chain issues.

“The ascendancy of electric vehicle registrations has been a bright light in a relatively bleak picture for new car registrations this year. Yet significant challenges lie ahead as we approach the fall. Drivers of electric vehicles are facing a substantial increase in charging costs due to the increased energy price cap and greater clarity is needed on company car tax tables beyond 2025 to give managers floats the information they need to make long-term purchasing decisions.

“As the new Prime Minister prepares to cross an already busy ferry, it is essential that policymakers continue to support the transition to an electric future and give drivers and businesses the confidence to switch to a vehicle. The government’s new £20m charging station scheme is another step in the right direction and all eyes will be on further support and funding to be announced before the end of the year .

Henry Duff, director of Net Zero at British Gas, said:

“Despite ongoing material and vehicle supply issues, EV adoption levels continue to show no signs of slowing as many more drivers realize the potential to go electric.

“While the continued growth is encouraging, we need to ensure that the UK charging network is ready so that drivers can access reliable, convenient and easy-to-use charging stations. Significant progress has already been made in installing charging stations in places of work and leisure, but deploying chargers closer to drivers’ homes will open up the possibility of adoption for many more electric vehicles.

“While August is generally a quiet month for franchise dealerships, approaching the all-important month of plate change acting as a catalyst to boost registration numbers, the market has instead grown,” said Sue Robinson, CEO of the National Franchised Dealers Association (NFDA) who represents franchise car and commercial vehicle dealers in the UK, commenting on SMMT’s latest passenger car registration figures.

Today’s figures show new car registrations in August were up 1.2% from the same period last year, to a total of 68,858.

Gasoline sales grew by 7.5%, from 29,451 units to 31,652. Diesel was down -12.3%.

Encouraging signs came from the electric vehicle market: 10,006 battery electric vehicles (BEVs) were registered in August, an impressive increase of 35.4% over last year. There are now 137,498 BEVs registered on the road in 2022. Registrations of plug-in hybrid vehicles (PHEVs) and hybrid electric vehicles (HEVs) decreased, by -23.1% and -0.7%, respectively.

Sue Robinson added: “Potentially inflation and rising energy costs could continue to impact consumer buying patterns; This, coupled with global supply constraints and semiconductor shortages, meant another month of low recording volumes, although moderate growth was recorded.

“The increase in petrol and diesel prices we’ve seen in recent months has led to steady growth in electric vehicle sales as people shift to greener and cheaper alternative modes of transport. Consumers are encouraged to visit an Electric Vehicle Approved (EVA) dealership as they are best equipped to meet this demand and offer a wide range of choice, price and knowledge to customers.

1 Enrollment August 2013 – 65,937

2 registrations January-August 2019 – 1,519,016