The UK had its best year for car sales since the pandemic in 2023, as more than 1.9 million were registered, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).
Growth of 289,000 over 2022’s 30-year low of 1.6 million sales was driven entirely by fleet customers, who registered 1.1 million cars alone, a 38.7% rise year on year.
The private market remained stable, with 818,000 registrations, as the cost of living crisis and high interest rates continued to bite and stalled further growth.
Last year’s numbers were still 17.7% down on 2019’s high of 2.3 million.
Despite this, SMMT boss Mike Hawes says the industry “faces 2024 with a lot more confidence and optimism” than the year before and predict it to push on further to 1.97 million.
Key to the growth was the record take-up of EVs, which accounted for one in six cars registered.
This was again driven by business and fleet buyers, thanks to the compelling tax incentives of going electric: benefit-in-kind tax rates will sit at just 2% until at least 2025.
Of the total 315,000 EVs registered in 2023 (up 50,000 on 2022), 242,235 were sent to fleets, meaning just 8.9% were private sales. In comparison, combined EV sales in 2020 and 2021 totalled 298,932.
Meanwhile, hybrids recorded 27.1% growth in 2023 to reach a 12.6% market share, while plug-in hybrids were up 39.3% (for 7.4% of the market).
Buyers again showed preference for superminis and SUVs, which accounted for 29.8% (around 86,000) and 28.6% (82,000) of total car sales. Crossovers such as the Ford Puma put in another strong showing, taking a 28.3% (81,000) slice.
These three segments have been the most popular since 2013.
“With vehicle supply challenges fading, the new car market is building back with the best year since the pandemic,” said SMMT chief Mike Hawes.
“Energised by fleet investment, particularly in the latest EVs, the challenge for 2024 is to deliver a green recovery.”
Call to halve VAT on EVs
The SMMT, backed by the automotive industry, has used the data to again call on the government to reintroduce EV incentives for private buyers after it revealed that consumer demand has flattened.
The UK is currently the only major European market without any non-business purchase incentives on EVs – but is the only market with a mandated minimum sales target through the new ZEV mandate.
As such, the lobby group wants Westminster to halve VAT on new EVs for three years, which would translate to lower purchasing costs – a similar level of support currently available to business buyers.
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