Consumer new car sales crash in December

Private new car sales endured the worst result since 2008 – the middle of the great financial crisis – as customers stayed away from car showrooms over the Christmas period.

Consumer new car sales fell by a whopping 14% in December compared to the same month last year, with only 45,000 new cars registered for the month according to data published this morning by the Society of Motor Manufacturers and Traders (SMMT). By contrast, fleet registrations continued their year-long meteoric growth, up 33% on last December, which meant that the overall market was up 10% on the same month last year.

The poor December results meant that consumer new car sales for the whole year ended up flat, about 600 units less than in 2022. Fleet registrations were up 39% on last year, meaning that the overall market grew by 18% in 2023.

Overall, it was the best year for new car sales since before the Covid-19 pandemic, although still well down on 2019 results (the last year before Covid-19 arrived in the UK).

There were mixed messages for EV sales, with registrations up for the year in line with the overall market but no growth in market share, despite the addition of numerous excellent new vehicles over the last year.

New car registrations by buyer type – December

2023 in total

Private new car sales slump shows no sign of recovery

December’s woeful consumer new car sales result follows a poor month in November (down 6% year-on-year) as rising new car costs, high interest rates and inflation, and squeezed household budgets continue to create a perfect storm for customers.

To add to those concerns, 2024 brings the misery of an election year here in the UK. Apart from the endless lies and empty promises that will be spouted by politicians of all stripes over the next few months, elections are toxic for car sales as the uncertainty tends to cause buyers to delay major purchases as much as possible.

New car registrations by fuel type – December

*includes mild hybrids
Source: SMMT

New car registrations by fuel type – 2023 in total

*includes mild hybrids
Source: SMMT

EV sales will get better in 2024 – because it’s now law

This year also sees the introduction of the government’s new Zero Emission Vehicle (ZEV) mandate, which stipulates that EVs must make up at least 22% of new car sales for each major car manufacturer. That means that EV sales have to increase by a third over 2023 levels to hit the 2024 target.

While that won’t be a problem for EV-only brands, like Tesla, or companies that are already successfully selling EVs (BMW announced this morning that 25% of its new car sales in the UK in 2023 were electric), other brands have almost no chance of hitting this target.

It’s entirely possible we could see some big-name brands stop selling petrol and diesel cars later in the year to avoid hefty fines (£15,000 per car) for missing the 22% target. Currently, Ford and Toyota look to be in bad shape, and others will also be struggling. The ZEV mandate is designed to limit horse trading of EV credits between manufacturers, so some brands may have no choice but to stop selling some fossil-fuel models before the end of the year.

We’ll have to wait and see how it plays out, but this is a concern for private new car sales as the SMMT says that only 9% of private new car buyers chose an EV in 2023. Car manufacturers will need to work out how to convince consumers to switch to an electric car as a matter of urgency to help them hit the government targets, as fleets won’t be able to shoulder all the responsibility for EV sales.

Percentage of new cars that must be EVs

Good month, bad month

As always, we look at how car manufacturers have performed against the overall market in December. Although the overall market was up by 10% compared to last year, not everyone had a great month.

It was a good end to the year for Abarth, Alfa Romeo, Citroën, Cupra, Dacia, GWM Ora, Honda, Land Rover, Mercedes-Benz, MG, Peugeot, SEAT, Skoda, Smart, SsangYong, Subaru, Suzuki, Toyota and Vauxhall. All of these brands outperformed the market by at least 10%, so achieved growth of at least 20% compared to last December.

Meanwhile, there was little Christmas joy for Alpine, Bentley, DS Automobiles, Fiat, Genesis, Jeep, Lexus, Maserati, Mazda, Nissan, Polestar, Porsche, Renault, Tesla* and Volkswagen. All of these brands underachieved against the market by at least 10%, which means sales that were flat or in decline compared to the same month last year.

That means that the following brands performed more or less how you’d expect in December: Audi, BMW, Ford, Hyundai, Jaguar, Kia, Mini and Volvo.

*Tesla had a more realistic month in December 2023 – the Model Y still topped the sales charts, but the record numbers seen in December 2022 didn’t reappear.

It’s worth bearing in mind that there will have been quite a few games being played with registrations over the last couple of months, that will be distorting the market. With the ZEV mandate coming into force in 2024, many manufacturers will have chosen to hold back on delivering new EVs to customers in December, preferring to wait until January in order to help boost their mandated EV numbers. Conversely, they will have been pushing to get every new petrol or diesel car out the door before December 31st.

Volkswagen was the best-selling brand of the month and the year, while BMW finished the year strongly in second place. Ford still ended the year as runner-up, however.

We’ll have a ‘Good year, bad year’ feature on The Car Expert in coming days, looking at the sales results for every car company for 2023 and looking ahead to what they might have in store for 2024.

Tesla takes December battle but Ford Puma wins 2023 war

As expected, the Ford Puma was the best-selling new car of 2023, comfortably beating the Nissan Qashqai – 2022’s sales champ – and the Vauxhall Corsa. It was a return to the top of the charts for Ford, which dominated for half a century until 2020, after which the Fiesta fell from grace in 2021 and 2022 before being discontinued in 2023.

The Tesla Model Y took top honours in December, however, although with less than half the numbers it achieved 12 months previously when Tesla set an unexpected sales record. The Model Y ended the 2023 sales race in fifth place overall, and was comfortably the UK’s best-selling electric car.

It was a strong month for the MG HS mid-size SUV, placing fourth ahead of the Ford Puma, which had a relatively quiet month to close out the year as it cruised to the 2023 sales crown.