Fleet sales down as new car market contracts in October
Electric sales only bright spot in depressed market.
Fleet registrations slid back 1.7% in October as the UK’s overall new car market fell by 6%.
In total 144,288 new cars were registered, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).
The fleet sector, which has been a continuing bright spot in two years of sliding private sales figures, saw registrations of 86,701 vehicles, down 1.7% compared to October 2023, helping to record the second overall fall in the market in 2024.
Private car purchases were down by some 11.8% – fewer than four in 10 (38.8%) of new cars registered in the UK over the first 10 months of 2024 have gone directly to private buyers.
The only bright spot in the figures was a continuing rise in battery-electric (BEV) sales – registrations were up 24.5% to claim close to 21% of the overall market. Petrol and diesel registrations slid 14.2 and 20.5% respectively, while hybrid and plug-in hybrid sales also stuttered, down 1.6% and 3.2% even before much less attractive benefit-in-kind tax rates were announced in the Budget on 30th October.
Commenting on the figures the SMMT stated that while the average BEV has a higher upfront cost than a combustion-engined equivalent, widening choice and huge manufacturer discounting mean that around one in five BEV models now has a lower purchase price than the average petrol or diesel car – a factor that itself is causing issues in the fleet and leasing market with longer-term concerns over residual values.
The SMMT added that while almost 300,000 new BEVs have reached the road in 2024, the 18.1% of the market they represent is still significantly short of the 22% target for this year under the terms of the Government’s Zero Emissions Vehicle Mandate.
Vehicle Excise Duty and Company Car Tax changes in the Budget were criticised by the SMMT as disincentivising low-carbon vehicle purchases and fleet renewal generally, risking a delay to the overall reduction in road transport emissions.
“Massive manufacturer investment in model choice and market support is helping make the UK the second largest EV market in Europe – that transition, however, must not perversely slow down the reduction of carbon emissions from road transport,” commented SMMT chief executive Mike Hawes.
“Fleet renewal across the market remains the quickest way to decarbonise, so diminishing overall uptake is not good news for the economy, for investment or for the environment. EVs already work for many people and businesses, but to shift the entire market at the pace demanded requires significant intervention on incentives, infrastructure and regulation.”
Close Brothers Motor Finance managing director John Cassidy commented that while overall the market was still seeing year-on-year growth, the effect of the Budget needs to be watched closely; “There will be hope that the fuel duty freeze will ease pressure on consumers’ wallets and stimulate demand.
“Many will be looking to see if announcements, such as the continuation of company car tax incentives until 2028 and the differentials in Vehicle Excise Duty, will have any impact on the demand for electric vehicles. These announcements, coupled with the promised investment in both manufacturing and infrastructure such as charging points, will have a key role to play in making the 2030 ban on new petrol and diesel vehicles realistic.”
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