The new year has started with mixed results for new car registrations, with fleet sales bouncing back from a poor January last year (and the January before that). Private new car sales were down, however, although this was also something of a correction from last year.
The good news headline for the car industry is that overall new car registrations were up 15% in January compared to the same month last year. As always, there are specific numbers that skew the overall data and we’ll explore these in more detail below.
Fleet sales continue to bounce back
The headline growth figures were thanks to far more deliveries being made to fleet customers, which were up 37% over the same month last year. A large chunk of that is market correction, however, as car companies were heavily restricting availability to fleets a year ago due to significant supply shortages.
Private new car sales were down 4% on last year, which is not a bad result given that last January was an unusually strong performance and customers are facing significant cost-of-living pressures, which is impacting on their new car purchasing choices.
The net result is that the market share for private and fleet customers have now both returned to what we would normally expect to see. As usual, ‘business’ purchases make up only a tiny number of overall sales, as most businesses will lease cars rather than buying them and these numbers are contained within the fleet column.
New car registrations by buyer type
|Buyer||Jan 2023||Jan 2022||%|
Hybrids and EVs perform strongly
It was a very strong month for conventional hybrid cars (the non-plugged type), which recorded year-on-year growth of 41%. A lot of that improvement is likely to come from Nissan’s unique e-Power system that is available in the big-selling Qashqai, as well as the Kia Niro, which had a strong month.
Fully electric car sales grew by 20% compared to the same month last year, outperforming the overall market despite a non-appearance by Tesla. This is a very good sign for the EV sector, which will see growth spike again the next time a boatload of Teslas arrives (probably in March).
[For new readers who haven’t followed our monthly analysis, Tesla works very differently to other car manufacturers and its registrations come in enormous waves every few months rather than in a steady stream each month. For example, Tesla registered more than 16,000 new cars in December. In January, it was fewer than 600 cars.]
Plug-in hybrids continue to struggle
Plug-in hybrids continue to underachieve against the overall market, showing less than 1% improvement in a market that grew by 15%, meaning they underperformed significantly. This is despite the MG HS – one the UK’s cheapest models with a plug-in option – topping the sales charts and the Kia Niro finishing fourth.
It was a poor month for ‘premium’ brands, with Audi, BMW, Mercedes-Benz and Land Rover all underperforming against the overall market. These brands also offer a large number of plug-in hybrid models, and it’s currently hard to tell whether their poor results hurt plug-in numbers or whether lack of demand (or supply) for plug-in hybrids hurt their sales. Given that plug-in hybrid sales have been tanking for a year now, it’s probably more of the latter than the former.
New car registrations by fuel type
|Fuel||Jan 2023||Jan 2022||%|
Good month, bad month
Regardless of whether the overall market moves up or down, there are always individual car brands that do better or worse than average. This month, the overall market was up almost 15% year-on-year.
When assessing who had a ‘good’ month or a ‘bad’ ‘month, we look for brands that have overachieved or underachieved against the overall market by at least 10%. So this month, a ‘good’ result means an increase of at least 25% compared to last January, while a ‘bad’ month means an increase of less than 5% (and in some cases, an actual decrease).
It was a good month for Citroën, Cupra, Fiat, Genesis, Jaguar, Jeep, Maserati, MG, Nissan, Polestar, Porsche, Renault, SEAT, Skoda, Suzuki, Tesla, Volkswagen and Volvo. All of these brands exceeded the overall market performance by at least 10%.
Meanwhile, it wasn’t so exciting for Abarth, Alfa Romeo, Alpine, Bentley, BMW, Dacia, DS Automobiles, Honda, Kia, Lexus, Mercedes-Benz, Mini, Peugeot, Smart, SsangYong and Vauxhall. All of these brands underachieved against the overall market by at least 10%.
That means that Audi, Ford, Hyundai, Land Rover, Mazda, Subaru and Toyota were all – more or less – in a similar position to last year in the overall marketplace. And we don’t have monthly registration data for low-volume brands like Rolls-Royce, McLaren, Ferrari and so on.
Volkswagen was the biggest-selling brand for January, ahead of Ford, Audi, Kia and Toyota. MG had a massive result, more than doubling its sales numbers from the same month last year.
Although there is inevitably variation and we’re only looking at the first month of the year, it’s interesting that ‘premium’ tended to perform poorly while ‘value’ brands tended to do well. We’ll keep an eye on this as the year progresses, but this has been the case for a few months now. It may well be that a growing number of customers are abandoning a posh badge in favour of something cheaper.
Best-selling cars, January 2023
MG stars in January
It was a surprise new name at the top of the sales charts in January as the MG HS started the year with a bang. Since the company’s rebirth under its Chinese ownership, it has made the odd appearance at the bottom end of the top ten in the past, but this is the first time – probably in the brand’s 99-year history – that MG has snared top spot.
It wasn’t just the mid-sized HS SUV that sold well for MG in January, as the smaller ZS SUV also popped up in eighth place. The brand has expressed confidence in recent months that it will be able to ramp up supply across most of its range, so we can expect to see repeat performances throughout 2023.
We’ll publish our usual full round-up of the month’s best selling cars shortly.
What to expect for 2023
Although it was almost entirely absent from January’s sales figures, Tesla continues to massively influence the new car market. Over the Christmas holiday period, the company announced an immediate price cut for both its UK models (the Model 3 and Model Y), by an average of about £7,000.
Apart from annoying anyone who recently bought a new Tesla before the hefty price cuts, it will inevitably have an effect on almost every other EV in the marketplace, since they are all now effectively about £7,000 dearer. This significantly changes the value equation for a Tesla compared to other EVs.
Some manufacturers have already publicly said that they won’t be attempting to match Tesla’s price cuts, but it seems likely that they will be forced into some sort of response before too long.
In addition, we’re expecting to see a number of new electric car brands – mostly from China – arriving in the UK in 2023. You’ve probably never heard of Aiways, BYD, Fisker, Lucid, Lynk & Co, Nio or Ora, but you soon will. In addition to Chinese-owned MG ramping up production of its EV models (MG 4, MG 5, MG ZS EV), this will put additional pricing pressure on other brands to reduce the prices of their electric cars.
All of this is hopefully good news for customers looking at a new EV in 2023. With more cars to choose from and improving production numbers from existing brands, the inevitable competition should see price drops and more discounting in the marketplace. It will take longer to feed through into the used car market, but the direction of travel will be the same.