23 Jun 2024
The voice of the independent garage sector

New car sales grow in January

New car sales went up 14.7% in January, with a total of 131,994 finding first-time owners during the month according to the latest figures from the SMMT, making it the best start to a year since January 2020.
Hybrid electric vehicles (HEVs) made up 14.4% the total, an increase of 40.6% for this segment. . Meanwhile, battery electric vehicle (BEV) sales went up 19.8% to 17,294 units, which represented 13.1% of the total for the month. Plug-in hybrid vehicles (PHEVs) went up 0.7%, and made up 6.9% of new cars for January.

Around one in five new cars had a plug in January, which is expected to increase to one in four during 2023.
Commenting on the figures, SMMT Chief Executive Mike Hawes said, “The automotive industry is already delivering growth that bucks the national trend and is poised, with the right framework, to accelerate the decarbonisation of the UK economy. The industry and market are in transition, but fragile due to a challenging economic outlook, rising living costs and consumer anxiety over new technology. We look to a Budget that will reaffirm the commitment to net zero and provide measures that drive green growth for the sector and the nation.”

John Wilmot, CEO at car leasing comparison website LeaseLoco, observed: “January registrations are a positive start to 2023, and a sixth consecutive month of growth shouldn’t be sniffed at, but the car industry should be under no illusions that the next few months are going to be challenging. The UK is teetering on the edge of a recession. Inflation remains above 10% and the Bank of England base rate is now at 4%, adding hundreds of pounds a month onto many homeowners’ mortgage costs. It may be asking a lot to expect consumers to loosen their purse strings and buy big ticket items such as a new car under the weight of such economic pressures, unless they need to or have available savings to take advantage of some favourable discounts.”

Mark Oakley, Director of AA Cars, said: “New car sales have begun the year brightly, and January’s upbeat figures mean year-on-year registrations have now risen for six months in a row. Welcome though it is, the surge in sales is partly a case of the market playing catch-up, as manufacturers work through the backlog of orders that were placed, but not fulfilled, last year as supply chain disruption held back the supply of new cars.

“Separate data from the SMMT showed the number of cars rolling off UK production lines in 2022 fell to the lowest levels since the 1950s, with output dropping by 18% in December alone, suggesting that we’re not yet out of the woods when it comes to the supply of new vehicles.

“The SMMT’s forecast is predicting that new car sales will rise by 11.1% in 2023 compared to last year, which would represent solid progress but still see sales fall short of their 2019 levels. While inflation may have peaked, it’s still in double figures and this is eating into people’s disposable income. By contrast, AA Cars data shows that the average prices of Britain’s most popular used cars have now levelled off. With prices rising elsewhere, this is steadily making second-hand cars even better value, making this a good time to shop for a used car. As a result, we’ve seen a stream of traffic on the AA Cars website from drivers who are in the market for a used, rather than new, car.”

NFDA Chief Executive Sue Robinson added: “It is encouraging that sales of new cars have risen in January and we have started the year in a strong position. Electric vehicles experienced significant growth and is driving the industry in the right direction. NFDA is confident that this trend will continue as supply constraints begin to ease and customer lead times start to fall.It is important that the transition to zero emissions continues to be supported by investments in the charging infrastructure and financial incentives for EV buyers.”