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The UK new car market saw a 2% year-on-year decline in 2022, chiefly driven by lower registrations to the fleet sector.
According to Society of Motor Manufacturers and Traders (SMMT) figures, fleet registrations were down by 7.5% last year compared with 2021, while private registrations were up by 2%.
Business registrations, classed as those to organisations with fewer than 25 vehicles, rose by 37%, but still only took a 2.8% market share, compared with 46.5% for fleet and 50.7% for private.
The fleet market suffered during 2022 as manufacturers admitted prioritising retail sales, although this issue subsided towards the end of the year, with much stronger fleet sales seen during the last few months. This trend continued in the monthly figures for December, which saw fleet registrations up by 42.9% year-on-year, amid an 18.3% growth in the overall market.
Annual fuel mix figures for 2022 reveal a strong performance by pure EVs, up by 40.1% compared with 2021, and taking 16.6% of the overall market.
It was also a strong year for conventional hybrid sales, up by 27.6% for an 11.6% market share. However, plug-in hybrid registrations were more sluggish, down by 11.5% for a 6.3% share of the market.
Mild hybrid petrol registrations were up by 10.9% for a 13.6% market share, but mild hybrid diesels were down by 26.7% to take 4.5% of the market.
Despite a 10.4% yearly fall, petrol cars were still by far the most popular, accounting for 42.3% of those sold in 2022, while diesel sales fell steeply again, by 38.9%, to a 5.1% market share.
The SMMT attributed the overall market decline, which was seen particularly during the first half of 2022, to continuing global parts shortages following the Covid-19 pandemic, which it said hamstrung the market despite underlying demand, with the overall total of 1.61 million cars registered around 700,000 below pre-pandemic levels.
It said supply constraints had prompted many manufacturers to prioritise zero-emission models, and that the average CO2 emissions figure of new cars registered had fallen by 6.9% to 111.4g/km, the lowest ever.
Looking ahead to 2023, the SMMT said that, while erratic supply would likely continue to impact manufacturing, supply chains were beginning to stabilise and semiconductor shortages were expected to ease.
SMMT chief executive Mike Hawes said: "The automotive market remains adrift of its pre-pandemic performance but could well buck wider economic trends by delivering significant growth in 2023.
"To secure that growth - which is increasingly zero emission growth - government must help all drivers go electric and compel others to invest more rapidly in nationwide charging infrastructure.
"Manufacturers' innovation and commitment have helped EVs become the second most popular car type. However, for a nation aiming for electric mobility leadership, that must be matched with policies and investment that remove consumer uncertainty over switching, not least over where drivers can charge their vehicles."
Reacting to the figures, Close Brothers Motor Finance director of sales Lisa Watson said: "Whilst still behind pre-pandemic levels, the number of new car registrations over recent months has seen steady year-on-year growth, with new registrations showing market improvement over the last five months and significant growth poised for 2023.
"Vehicle suppliers should be better equipped [in 2023] to manage disruption and resource issues, which will help to alleviate the existing backlog of orders."
Lex Autolease electrification propositions lead Meryam Brassington said: "[The] rise in EV registrations has been a positive light against a gloomier backdrop for the motor industry, with ongoing supply chain issues continuing to put the brakes on new models coming to market.
"For the UK to truly begin to lead the way in encouraging EV ownership, removing bumps in the road for new electric converts needs to be a priority for both government and industry as they make their New Year's resolutions.
"Greater availability of charge points in towns and cities right across the UK will be key, helping to address the postcode lottery that still exists for many drivers.
"Support also needs to be in place beyond 2023 for a fairer road taxation system that's focused on cleaning up the older, more polluting vehicles from the UK's roads, while also supporting demand in the growing second-hand EV market."
Novuna Vehicle Solutions managing director Jon Lawes said: "Last year ended with a better-than-expected increase in EV ownership. We expect this positive trajectory to continue into the new year, despite supply issues continuing to hamper the industry's ability to meet demand.
"However, as we enter 2023, the road to net zero remains bumpy, with EV infrastructure failing to keep pace with adoption. Our analysis shows that to hit government targets, 30,000 new charging points will need to be built every single year for the next seven years, a tenfold increase in the number put in the ground in the past decade.
"Addressing the fragility of the current charging network, at scale and ahead of need, is critical to support mass adoption of EVs which requires urgent collaboration and investment from across the sector in the year ahead."
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