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Fleets drive new car sales growth in May

New car registrations enjoyed the most 'normal' month they've had all year in May, as sales showed good improvments – with some caveats.

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New car registrations enjoyed the most ‘normal’ month they’ve had all year in May, with showrooms actually open for the whole month and businesses starting to ramp up operations as the UK slowly unlocks.

More than 156,000 new cars were registered in May according to figures published today by the Society of Motor Manufacturers and Traders (SMMT), which was a significant improvement on April. Once again, it was the fleet sector leading the way, taking more than half of the total market.

Fleet registrations have traditionally made up 50-55% of the new car market, but over the last year this fell sharply as thousands of UK companies simply stopped buying or leasing new cars unless it was absolutely necessary.

Are we seeing a fundamental shift in new car buying habits?

The normal year-on-year comparisons are pretty pointless, since May 2020 was a disastrous month for the UK car industry, but it’s worth noting that May 2021 was still down nearly 15% on May 2019’s results, and about 13% down on a ten-year average for the month of May.

This is not that surprising, and in fact it rather fits in with the bigger picture of a steady long-term decline in the new car market – a problem that had largely been of the industry’s own making. It also fits in with what we’ve been saying at The Car Expert for a few years now – that the rate of growth in people buying ever-more expensive new cars every three years was a bubble that had to burst at some point.

It’s too early to see how this will play out over the next year, but the pandemic may well have made a lot of people realise that their car-buying habits of the last decade were simply unsustainable.

There has also been a shift from new cars to used cars, driven partly by customers’ desires to reduce cost and lengthy waitin times on many new cars. The current shortage of crucial memory chips that power the on-board computers that run modern cars has caused huge production headaches around the world, and is set to cause delays on new car deliveries for months to come.

May was also a fairly normal month when it came to the sort of cars that were being registered. Diesel sales continue to fall as expected, petrol remains static at about 60% of all new cars, while electric, plug-in hybrid and regular hybrid sales all continue to increase.

The figures appear distorted by two factors: Firstly, May 2020 was a highly unusual month, with most showrooms closed for most of the month and very few dealers/manufacturers offering online sales. This helped brands that specialise in online sales and home delivery – like Tesla, which did outstandingly well under the circumstances. This makes backwards comparisons basically pointless.

Secondly, the SMMT figures now split mild hybrid petrol and diesel engines out from other petrol and diesel engines. This might suit political agendas but makes analysis of the data more difficult, especially since mild hybrid engines are rapidly replacing unassisted engines in almost every new model launched onto the market.

Good month, bad month

Our usual analysis of which brands have outperformed the market and which have fallen behind is rather pointless this month, as everyone improved their results by at least 200% on the same months last year. The overall market was up by 674% and there was enormous variation across all of the car companies.

One thing we can say with certainty is that it was a good month for both Volkswagen and Audi, which stormed to the top two places in overall new car registrations. Perennnial market leader Ford fell to third, just ahead of BMW.

This is going to be pretty topsy-turvy for a while as, on one hand, the market returns to life as the country returns to normal, but on the other hand, production problems will affect some brands more than others in coming months. It’s going to be a roller coaster ride for some car companies for the second half of this year.

Golf to the fore as Fiesta takes a siesta

OK, apologies for two bad puns in one headline. But it was a good month for the Volkswagen Golf, which drove to the top of the charts in May, and a poor month for the Ford Fiesta, which fell to seventh place.

This was good news for the Vauxhall Corsa, which has now extended its year-to-date sales lead over the Fiesta to more than 2,000 units. It might be to early to declare that the king is dead, but he’s certainly not looking too healthy.

Increasing fleet registrations have almost certainly helped the Golf, and are also likely to be a factor in the market share of ‘dual-purpose vehicles’ (SUVs and crossovers) falling overall, being overtaken by ‘lower medium cars’ (Golf, Mercedes A-Class, Ford Focus, etc.) that are favoured by fleets for their lower prices and better fuel economy.

We’ll publish our usual breakdown of the month’s top ten in the next day or so.

The latest from The Car Expert

Stuart Masson
Stuart Massonhttps://www.thecarexpert.co.uk/
Stuart is the Editorial Director of our suite of sites: The Car Expert, The Van Expert and The Truck Expert. Originally from Australia, Stuart has had a passion for cars and the automotive industry for over thirty years. He spent a decade in automotive retail, and now works tirelessly to help car buyers by providing independent and impartial advice.