February New Car Sales Hit 90k, Best Since 2004

February 2023 marked a significant milestone for the UK automotive industry. New car sales reached 90,100 units, the highest for the month since 2004. This figure reflects a 7.2% increase from the previous year, driven primarily by a surge in retail registrations.

Key Sales Data

The Society of Motor Manufacturers and Traders (SMMT) reported impressive growth in both retail and fleet segments. Key highlights include:

• 35,000 cars registered to private buyers, reflecting a 17.6% increase in retail sales.
• A 2.8% growth in fleet sales, which accounted for more than half of total new car registrations.
• A decline of 12.7% in the business segment sales.

Electric Vehicle Market Trends

Despite the overall market growth, electric vehicles (EVs) faced challenges. In February, they constituted only 24.2% of registrations, down from over 25% the previous year, even with a 2.8% increase in actual registrations.

The SMMT noted that this decline may be due to a previous surge in EV sales before tax changes took effect in April 2022. Manufacturers had pushed sales aggressively to comply with the Zero-Emission Vehicle (ZEV) mandate.

Market Volatility and Upcoming Changes

February is inherently a shorter month, which can exaggerate sales fluctuations. Buyers often delay purchases until the March number plate change. Thus, March’s data is expected to be crucial for predicting trends in the electric car market.

Current statistics show the year-to-date battery electric vehicle (BEV) market share stands at 22.0%, just two-thirds of the mandated 33% target for 2026. This has raised concerns about buyer confidence, especially with proposed plans for a pay-per-mile tax for EVs starting in 2028.

Hybrid Vehicle Performance

While electric car sales slowed, plug-in hybrid electric vehicles (PHEVs) witnessed robust growth. Their sales surged by 43.5%, achieving a record market share of 11.6%. Traditional hybrids captured an additional 13.1% of the market.

In contrast, sales of pure petrol vehicles dropped to 46.5%, despite a slight increase in demand. Diesel vehicles continued their decline, with a 3.8% drop in sales, resulting in a meager 4.5% market share.

Overall, February 2023 showed promising signs for the UK car market, setting the stage for a pivotal month ahead.