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Fleets hardest hit as new car sales continue to fall

Date: 06 June 2022   |   Author: Sean Keywood

The UK new car market saw another major decline in May, with registrations down by 20.6% year-on-year, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).

As has been seen in recent months, fleet sales have continued a particularly steep decline, with manufacturers said by the SMMT to be focusing on deliveries to private buyers amid continued global supply chain disruption.

Fleet registrations were down by 29.9% year-on-year, and registrations to businesses with fewer than 25 vehicles down by 27.1%, while private registrations were only down by 10.3%. This meant private registrations accounted for 53.2% of the market, while fleets took 44.7%

As well as the 20.6% year-on-year decline, May's overall registrations were also down by 32.3% compared with May 2019, the last year before the Covid-19 pandemic.

In terms of fuel mix, EV registrations were up by 17.7% year-on-year in May, for a 12.4% market share, but plug-in hybrids were down by 25.5%, taking 5.9% of the market.

Conventional hybrids were up by 12%, for an 11% market share, while mild hybrid petrols were down by 10.8%, for 13.5% of the market, and mild hybrid diesels were down by 45.2% for a 4.7% market share.

Diesel car registrations were down by 50.8%, taking 6.1% of the market, and petrol car registrations were down by 25.1%, for a 45.6% market share.

SMMT chief executive Mike Hawes said: "In yet another challenging month for the new car market, the industry continues to battle ongoing global parts shortages, with growing battery electric vehicle uptake one of the few bright spots. 

"To continue this momentum and drive a robust mass market for these vehicles, we need to ensure every buyer has the confidence to go electric. This requires an acceleration in the rollout of accessible charging infrastructure to match the increasing number of plug-in vehicles, as well as incentives for the purchase of new, cleaner and greener cars.

"Delivering on net zero means renewing the vehicles on our roads at pace but, with rising inflation and a squeeze on household incomes, this will be increasingly difficult unless businesses and private buyers have the confidence and encouragement to do so."

Reacting to the figures, Jon Lawes, managing director of leasing company Novuna Vehicle Solutions, claimed EV registrations were on course to reach parity with petrol and diesel cars in the near future.

He said: "Electric vehicles have been flying off production lines this year, so much so that new EV registrations still seem highly likely to reach parity with petrol and diesel vehicles in a matter of months. 

"It's a psychologically important tipping point, and one we are accelerating towards so quickly because prolonged supply chain challenges are strangling production across the industry, causing manufacturers to prioritise the supply of EVs in the face of healthy demand.

"Supply is constrained on both sides of the market, but we've yet to see recently emerging fears around battery supply do much to curtail the production of EVs, and certainly not to the same extent as across the rest of the industry. 

"We're very much in a sellers' market, which points to further price rises, and longer waiting lists, which means consumers and commercial fleet operators need to plan well ahead and consider extending existing leasing contracts to cover the delay in new vehicle deliveries."