Private new car sales results seem to be going from bad to worse, with some pretty awful results for the important month of March – traditionally the biggest month of the year for new car sales.
Sifting through historic data from the Society of Motor Manufacturers and Traders (SMMT), it looks like this was the worst March result since the current twice-yearly number plate change system came into effect in 1999 – with the exception of 2021, when showrooms across most of the UK were closed due to Covid (and even that wasn’t much worse than this year’s numbers…).
According to the SMMT, approximately 128,000 new cars were registered to private customers in March. That’s down 8% on the same month last year (which wasn’t a great month anyway), and 40%-50% down on the numbers we routinely saw pre-pandemic, where 250,000+ private new car sales was a common result.
Fleet sales continued their strong showing of the last year, up 30% on last year at about 181,000 registrations. But this still pales in comparison to pre-pandemic March results, which were again routinely 220-270,000.
Does this mean that car buyers have lost interest in having the latest number plates?
Private new car sales slump continues
Consumer new car sales have been sliding since about halfway through the last decade (peaked in 2015/2016), but the slowdown seems to be accelerating in recent months. It affects all types of new cars, and certainly not just EVs as certain national newspapers would love you to believe.
Unless anything radical changes (even more radical than a rout of the current government at the coming election), this trend is going to continue. New car prices are very high, and interest rates are higher than they’ve been for the last 15 years. Inflation on most consumer bills is squeezing household budgets, so buying a new car is getting harder for many people. Car finance terms are getting longer, so people are changing their cars less often. And so sales keep on falling.
Fleet sales are doing well, continuing their recovery from the depths of Covid. Whether this continues in the longer term remains to be seen.
EV sales slowing, although there are reasons for it
EV market share was disappointing, given that the industry has tough sales targets to hit this year. But there are extenuating circumstances that affected the results.
EV registrations were up 4% (about 1,700 cars) compared to overall market growth of 10%, meaning that market share dropped from 16% to 15%. But Tesla sales alone were down by about 3,500 vehicles after the company battled two factory closures in the last three months and the introduction of an updated model (which usually slows sales as production rates slow during model changeovers).
Tesla’s sales also fluctuate far more than other brands so single-month analysis can be quite misleading, and the company is the largest player in the EV market so those fluctuations have a significant influence on the overall sector results. If we look at the year-to-date results, EV market share is at 15%, same as last year and growing in line with overall market growth – but is still a long way short of hitting the 22% required by the government.
The two top-performing brands in March, Volkswagen and Nissan, are also behind on their EV sales targets, so it’s unlikely that they will be able to sustain their March success over the rest of the year as the government’s EV sales mandate begins to bite.
As the year progresses, we expect to see fiercer discounting on electric cars as car manufacturers scramble to hit their mandate targets and avoid large government fines. It’s a good bet that fleet customers, in particular, will be content to wait a bit longer where possible to get better deals before committing to large EV orders.
Good month, bad month
The overall market was up 10% on last March, but there was significant variation between the manufacturers’ performances.
It was a strong month for Abarth, Alpine, BMW, BYD, Cupra, Dacia, GWM Ora, Honda, Jaguar, Jeep, KGM (nee SsangYong), Lexus, Mercedes-Benz, Nissan, Peugeot, Renault, SEAT, Skoda, Smart, Subaru, Vauxhall and Volvo. All of these brands outperformed the overall market by at least 10%, which means they grew their sales by at least 20% over the same month last year.
The news wasn’t so good for Alfa Romeo, Audi, Bentley, Citroën, DS Automobiles, Ford, Genesis, Hyundai, Kia, Maserati, Mazda, Mini, Polestar, Porsche, Tesla or Toyota, who were all at least 10% below the overall market – meaning they sold the same or fewer cars than last March.
That leaves Fiat, Land Rover, MG, Suzuki and Volkswagen who all pretty much held steady, being within plus or minus 10% of the overall new car market.
BMW and Renault were the stand-out performers among the volume manufacturers, each increasing their sales by more than 5,000 units over the same month last year. Going in the other direction, both Ford and Tesla sold about 3,500 fewer cars than they did a year ago.
Volkswagen continued to be the UK’s best-selling car brand in March, ahead of Nissan, BMW, Mercedes-Benz and Kia.
Qashqai cashes in to top the charts
The UK-built Nissan Qashqai topped the sales charts, just pipping the 2024 sales leader (and 2023’s best-selling car), the Ford Puma. There was further good news for the local workforce in Sunderland, with the Nissan Juke taking fourth place.
The Mini hatch normally performs very well in March, but was absent from the top ten this year as the model is currently a changeover period as production of the all-new model (which is now called the Mini Cooper) begins.
We’ll have our usual detailed look at the top ten in coming days.
