It was a superficially positive headline for new car sales in August with private sales up by 3% and the overall new car market up 1% over the same month last year. But that’s somewhat misleading.
August last year was a poor month (private sales down 15%, overall market down 22%), so being slightly better than that isn’t exactly cause for celebration – it was still the lowest number of August new car registrations since 2013.
Drawing conclusions from August data is always difficult, as it’s usually the slowest month of the year for new car sales. It also tends to throw up anomalies in the results, as car manufacturers either hold back deliveries until the September number plate change or register larger numbers of some cars to hit certain targets.
This year’s August data is even more mixed up than usual, although we can still see the continuation of longer-term trends that we’ve highlighted in recent months:
- Supply issues continue to hold up new car deliveiries, although there have been numerous suggestions within the industry that things are gradually improving.
- Car manufacturers are still prioritising private customers over fleet for their limited numbers of deliveries, because consumers pay more for their cars so car companies can actually make more money by selling fewer cars
- The 2022 theme of “smaller, cheaper, greener” seems to be continuing as customers shun larger, heavier and more expensive vehicles to reduce the impact of a new car on both their wallets and the environment
- Plug-in hybrid sales are continuing to fall as customers either go all-in on electric power or stick with a petrol car
Plug-in hybrid sales are tanking
It is becoming clear that the plug-in hybrid is not really the answer to anyone’s needs. While sales of fully electric cars are up by nearly 50% (and constrained by lack of supply) in year-to-date sales and regular hybrids are up nearly 20%, plug-in hybrids were down 23% in August and nearly 16% for the year to date – considerably worse than the overall market.
Plug-in hybrids have been touted as being ‘the best of both worlds’ for car buyers not ready to commit to a fully electric car, but the reality is that, for many people, they’re actually the worst of both worlds. Most of the time, drivers often have an underpowered petrol car that’s carrying hundreds of kilos of idle electric motor and flat battery, or they have a heavily compromised electric car that’s also carrying hundreds of kilos of idle petrol engine and associated gubbins.
Plug-in hybrids no longer get any government grants or massive tax incentives anymore, giving buyers fewer and fewer reasons to choose them. As a result, we seem to be seeing buyers either embracing fully electric cars or sticking with regular petrol/diesel models for now.
Good month, bad month
August is always a mixed bag when it comes to individual manufacturer performances, as many brands will be holding back deliveries until September (since residual values tend to be at least partially linked to having the newest-possible number plate). But this August is even more mixed than usual. As such, feel free to take any of the below with a large pinch of salt.
Registrations were relatively strong for Alfa Romeo, Citroën, Cupra, Dacia, DS Automobiles, Ford, Genesis, Hyundai, Mini, Nissan, Porsche, Renault, Smart, SsangYong, Tesla and Vauxhall. All of these brands outperformed the overall market by at least 10%.
Meanwhile, it wasn’t such good news for Abarth, Alpine, Audi, Bentley, Fiat, Honda, Jeep, Kia, Lexus, Maserati, Mazda, Mercedes-Benz, Polestar, SEAT, Subaru, Suzuki and Volvo. All of these brands underperformed against the market by at least 10%.
Polo season in full swing
The Volkswagen Polo made a surprise appearance at the top of the charts in August, ahead of the Ford Puma and Hyundai Tucson. Again, take the top ten chart below with a pinch of salt – The Polo’s 1,900 registrations in August wouldn’t get anywhere near the top ten in September.
Although the Puma has closed slightly on the Vauxhall Corsa in the overall race for the new car sales crown, it’s unlikely to make too much of a difference. With four months to go, the Corsa holds a much larger lead than it did at this time last year. So unless Vauxhall has some kind of end-of-year sales meltdown, the Corsa looks set to retain its crown.
Only five of the best-selling cars of 2022 to date actually featured in the August best-sellers list, and it was particularly notable that there is no Nissan Qashqai or Mini hatch, the two top performers from last month. Expect next month to look quite different, probably with the Tesla Model 3 and Model Y both featuring prominently.
What can we expect in September?
In short, nothing very positive. Last year’s September results were awful, down 34% on 2020, so it’s entirely possible that this year will improve on that low mark. But the supply issues and cost of living crisis won’t magically disappear, regardless of whatever the UK’s new prime minister may promise.
New car supply does appear to be improving after about a year of significant problems. The end of 2021 saw new car sales collapse for many popular models as car manufacturers simply couldn’t build any vehicles. That problem hasn’t gone away, but it’s not as bad as it was then.
September is a strong consumer month (private buyers love new number plates, fleet buyers are less bothered unless the numbers add up), so that will probaly mean a boost for EV sales. Tesla has had a quiet couple of months, so expect a big backlog of Models 3 and Y to suddenly be delivered to waiting customers. If it’s anything like March (when Tesla took the top two spots in the sales charts), that will be enough to distort the entire new car market.