UK new-car market breaks growth streak ahead of plate change

09 September 2024

August saw new-car registrations in the UK decline for the first time since July 2022. Autovista24 editor Tom Geggus examines the latest data ahead of the country’s plate change in September.

According to the Society of Motor Manufacturers and Traders (SMMT), 84,575 new cars hit the UK’s roads last month. This meant the market shrank by 1.3% compared with August 2023, breaking a two-year-long growth streak.

This quiet period is the result of buyers holding off on any purchases until new number plates are issued. With updates taking place every March and September, next month’s change will see the introduction of ‘74 plates’. This number plate will indicate that a vehicle was registered between 1 September 2024 and 28 February 2025.

‘August signals the end of two straight years of growth in the new car market, a disappointing development despite traditionally being a quiet month’ said Sue Robinson, chief executive of the National Franchised Dealers Association (NFDA).

‘The final quarter of the year, coupled with the added boost of September as a plate change month, will be interesting to observe. There are several issues that need to be dealt with as we near the end of the first year under the zero-emission vehicle (ZEV) mandate,’ Robinson added.

Plate change effect

This recent plate-change effect had a particularly strong influence on the fleet and business sectors. Operators are willing to wait another month to re-stock their fleets as models will have a newer vehicle registration plate. This can help residual value rates when it comes to de-fleeting.

Fleet registrations dropped by 1.2% year on year in August to 51,329 units, the first fall since August 2022. However, this did not change an ongoing trend of the sector leading the UK’s new-car market in terms of volume. Last month, three in five cars were destined for fleet buyers, with a 60.7% share of all registrations in the month. This was stable from the previous year.

Businesses continued to experience turbulence as registrations fell 30.3% compared to August 2023. However, the sector only accounts for small registration volumes each month. A total of 1,136 units were delivered in August, making up 1.3% of the overall market. This was down 0.6 percentage points (pp) year on year.

Private registrations experienced a very small upswing, with deliveries growing by 0.2% to 32,110 registrations. This was the first time the sector recorded a rise in deliveries since October 2023. The segment accounted for 38% of the market in August, compared to a 37.4% share from 12 months ago.

In the year to date, fleet deliveries jumped 19.2%, thanks to 743,259 units. The sector took a 60% market share from January to August, up 7.1pp year on year. Business registrations fell 3.3% in the first eight months of the year, reaching 27,251 units. This resulted in a market share of 2.2%, up 0.2pp.

With a total of 468,345 deliveries, private volumes dropped 11.2% year-to-date. The sector accounted for 37.8% of the market, a significant distance from its 44.7% share during the same period in 2023.

Heavy discounting

Thanks to heavy manufacturer discounting, as well as new model launches, battery-electric vehicle (BEV) deliveries increased by 10.8%. With 19,113 units hitting the roads, all-electric cars made up 22.6% of new-car volumes in August.

This was the highest share recorded for a month since December 2022, when deliveries improved by 32.9%. Last month’s market share figure for BEVs also exceeded the 20.1% recorded in August 2023.

Across the first eight months of 2024, BEVs saw volumes grow 10.5%, reaching 213,544 units. The technology captured 17.2% of the new-car market from January to August, up 0.8pp.

Meanwhile, plug-in hybrid (PHEV) registrations fell by 12.3% to 5,786 units. This meant the powertrain accounted for 6.8% of the market, down 0.9pp from the same period one year ago. Yet, the PHEV segment still saw deliveries surge 24.9% in the year to date. This was the strongest growth of any powertrain in this period. With 100,457 registrations, its market share improved by 1.3pp to 8.1%.

Combined deliveries of BEVs and PHEVs saw new electric vehicle (EV) deliveries increase by 4.4% to with 24,899 units. This meant plug-ins claimed 29.4% of the overall market in August, up 1.6pp from 12 months ago.

Welcome EV growth

‘August’s EV growth is welcome, but it is always a very low volume month and so subject to distortions ahead of September’s number plate change,’ said Mike Hawes, SMMT chief executive.

‘The introduction of the new 74 plate, together with a raft of compelling offers and discounts from manufacturers, plus growing model choice, will help increase purchase consideration and be a true barometer for market demand,’ he added.

Hawes highlighted that encouraging a mass-market shift to EVs remains a challenge. He pointed out that urgent action needs to be taken for buyers to overcome the issue of affordability. Concerns about charging infrastructure also need to be addressed.

From January to August, plug-in registrations rose 14.7%, equating to 314,001 units. This gave EVs a market share of 29.4%, up from 25.3% from the same period one year ago.

‘Consumers continue to face numerous challenges, with cost remaining the most significant barrier to electric vehicle adoption,’ Robinson stated. ‘It is crucial that the Labour government addresses these concerns, emphasising the need for price incentives for private consumers to complement this supply-side shift.’

Hybrid high

Full hybrids (HEVs) continued to enjoy success in the UK new-car market. Registrations increased by 36.1% as 11,639 new vehicles took to the roads in the month. This meant the powertrain accounted for 13.8% of the market, up 3.8pp from August 2023.

HEVs recorded 170,449 deliveries in the year to date, up 17.9%. The powertrain accounted for 13.8% of the new-car market in the first eight months of the year, an increase of 1.5pp year on year.

As buyers seek to take advantage of electrified technology without committing to full electrification, hybrids provide various stepping stones. The powertrain provides some green credentials while also backing users up with an internal-combustion engine (ICE).

The SMMT categorises mild hybrids (MHEVs) with their ICE counterparts instead of counting them separately or merging them in with HEVs. This does lead to slightly inflated figures for both petrol and diesel.

Most popular powertrain

Petrol remained the most popular drivetrain on the UK market in August, making up 50.7% of deliveries. However, this was down by 5pp on 12 months ago, as the powertrain’s popularity wanes. Deliveries of the ICE technology fell by 10.1% year on year to 42,872 units.

From January to August, petrol volumes were up 0.8% with 674,312 registrations. The powertrain took a 54.4% share in this period, down 2.3pp.

Diesel continued its descent, with registrations falling 7.3% last month to 5,165 units. This means the powertrain only made up 6.1% of the country’s new-car market, down from 6.5% a year ago. Year-to-date deliveries declined 13% for the drivetrain, with 80,093 units. The technology’s market share dropped 1.3pp to 6.5% when compared to the first eight months of 2023.

In August, ICE cars represented 56.8% of registrations in the UK, down 5.4pp. This equated to a delivery drop of 9.8% to 48,037 units. The powertrain grouping captured 60.9% of the new-car market from January to August, down 3.6pp. ICE volumes dropped more marginally in the year to date, down 0.9% to 754,405 registrations.