The UK new car market rose for six consecutive months in January as supply chain issues plaguing the sector continue to ease, according to new industry figures released on Monday morning.
Some 131,994 new cars were registered last month, up 14.7% from January 2022, the Society of Motor Manufacturers and Traders (SMMT) said.
Electrified vehicles drove the increase, especially hybrids. And 100% battery models easily outsell diesels in the first month of the year.
However, experts remain “cautiously optimistic”, warning that squeezing the cost of living and slow installation of charging stations could soon affect demand for plug-in models.
Topping the sales chart in January was China-backed MG, with its £31,095 HS plug-in hybrid SUV the most purchased model.
Auto industry ‘cautiously optimistic’ for 2023: Britain’s new car market rose for six straight months in January as supply chain issues plaguing the sector continue to ease
Hybrid electric vehicle registrations saw the biggest jump in January, up 40.6% from the same month in 2022.
With 18,975 conventional hybrids on the road last month, only gasoline (76,216 registrations) were sold in greater numbers in terms of fuel type.
Plug-in hybrids remained relatively flat, up just 0.7% – although the top-selling MG HS model (3,481 registrations) was among 9,109 PHEVs purchased last month.
As for purely electric models, sales increased by 13.1% compared to January 2022.
Some 17,294 electric vehicles were purchased last month. By comparison, dealers sold only 10,399 diesel cars.
The MG HS was the best-selling car last month. Nissan’s Qashqai – the UK’s most bought new car in 2022 – has fallen to third place behind the VW T-Roc SUV
Some 131,994 new cars were registered last month, up 14.7% from January 2022, the Society of Motor Manufacturers and Traders confirmed Monday morning.
That said, pure electric car sales were down from the 16.6% average growth in 2022.
A new forecast from SMMT predicts that total registrations for all of 2023 will reach 1.79 million, up 11.1% from last year.
However, the slow rollout of new electric vehicle charging stations and the impact of cost-of-living compression could strangle demand for battery-powered vehicles.
He said the ratio of new charging station installations to new plug-in cars fell from 1:42 in the last three months of 2021 to 1:62 between October and December last year.
Government ‘falling asleep at the wheel’ on electric vehicle charging infrastructure
Monthly installations of new devices must increase by 288% if ministers are to meet target
The UK’s electric car charging infrastructure remains at crisis point with just 800 new devices being added per month, according to the latest official figures released by the Department for Transport.
He confirmed that there were a total of 37,055 public charging stations as of January 1, 2023, compared to 34,637 devices at the start of October 2022.
This means that on average, only 806 new chargers are added to the public network per month – an installation rate that must rise to 3,130 per month (a 288% increase) if the government is to meet its promised target. to have 300,000 devices nationwide by 2030.
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SMMT Managing Director Mike Hawes said: “The automotive industry is already generating growth that bucks the national trend and is poised, with the right framework, to accelerate the decarbonization of the British economy.”
“The industry and the market are in transition, but are fragile due to a difficult economic outlook, rising cost of living and consumer anxiety about new technologies.
“We look to a budget that will reaffirm the commitment to net zero and deliver measures that drive green growth for the sector and the nation.”
Ian Plummer, Commercial Director of Auto Trader online vehicle market, said: “In a turbulent economic environment, six consecutive months of year-on-year growth for the new car market is heartening, but electric vehicle sales have come down to earth.
“In our market, demand for new electric vehicles is at a three-year low thanks to higher energy bills.
“They now represent less than one in 10 of all new car inquiries sent to retailers – up from almost 30% last summer.”
Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte, said around one in 20 UK consumers are planning to buy a car in the next three months, adding that strong consumer demand could “continue for the rest of the year”.
However, he also raised concerns about EV demand linked to the charging network.
“Having hit a monthly sales record in December, electric car sales remain strong with a 20% market share this month,” he said.
“Having the infrastructure in place to meet the demand for EV charging remains a challenge and will be key to making EV ownership more widespread.”
Experts have warned that the slow installation of electric vehicle charging stations could dampen demand for battery-powered cars
Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said there was a “constant drumbeat of anticipation in the air” among dealers as January marked a sixth consecutive month of new car registrations.
She added: “With positive forecasts, easing supply issues and full order books, it looks like it is indeed a good year.
“In these times of electric positivity, companies are said to account for more than two-thirds of all BEV/hybrid vehicle purchases, and while the hope of going green across the board remains, dealers need to ask themselves: the costs and demand for charging stations increase deter private buyers from going electric? »
Jim Holder, editorial director of What Car? magazine, said: “Electric vehicles were the success story of the last year.
“For adoption to continue to grow this year, it is crucial that the cost of living crisis is contained as technology continues to prevail over petrol and diesel models.”
Sue Robinson, chief executive of the National Franchised Dealers Association, added: “It is important that the transition to zero emissions continues to be supported by investment in charging infrastructure and financial incentives for buyers of electric vehicles and this was recently addressed in the NFDA’s Spring 2023 budget. submission.
“Throughout 2023, we are confident that retailers will continue to show their resilience and ability to meet buyer demand with growing footfall levels in showrooms and an ever-improving online offering from resellers. .”
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