Press release

5 Jun 2024 Leeds, GB

22nd consecutive month of growth for new car registrations, but challenges persist

New car registrations saw a 22nd consecutive month of growth in May, with a total of 147,678 sales, leading to a minor but important uplift of 1.7% year-on-year. The UK auto industry took another step closer to reaching a remarkable two years of consistent growth

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James White
James White

Senior Executive, Media Relations, Ernst & Young LLP

Communications professional experienced in public relations, journalism and media relations. Aston Villa supporter. Passionate about sports and automotive. Former sports journalist.

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David Borland, EY UK & Ireland Automotive Leader, comments on the Society of Motor Manufacturers and Traders (SMMT) new car registration figures for May 2024:

“New car registrations saw a 22nd consecutive month of growth in May, with a total of 147,678 sales, leading to a minor but important uplift of 1.7% year-on-year. The UK auto industry took another step closer to reaching a remarkable two years of consistent growth, despite ongoing macro headwinds, including an extended period of economic stagnation, cost-of-living challenges, changing sustainability regulations and the implications of the upcoming general election.

“However, despite the warranted positivity around such consistent growth, some micro sector themes are continuing to persist. Fleet sales were, once again, almost the sole driver of new registration growth in May, with 14% growth year-on-year, while private retail sales once again declined, with a fall of just under 13%. This highlights the complex hurdles facing the auto industry in appealing to private consumers, including the transition to Battery Electric Vehicles (BEVs), where private demand fell by 2%.

“In May, overall BEV sales were up 6.2% year-on-year, a step in the right direction for Original Equipment Manufacturers (OEMs). However, the market share for BEVs for the year so far was 16.1%, still a significant way behind the 22% target of the Zero Emissions Vehicle (ZEV) Mandate. Some of the micro sector themes impacting BEVs continue to be public charging infrastructure, total cost of ownership and a lack of incentives to encourage the transition.

“Plug-in Hybrid Electric Vehicles (PHEVs) once again demonstrated their potential as an appealing transition technology as the powertrain with the most significant growth, with sales up 31.5% compared to May last year. 

“As the industry navigates these challenges, there have been recent reports that OEMs are considering decelerating their overall sales to increase the likelihood of staying compliant with the ZEV Mandate and avoiding significant penalties. While this may seem a way of negating short-term risk, this is unlikely to be sustainable for the longer term. It is therefore critical that OEMs, retailers and policymakers work together to find a balance between accelerating the transition towards cleaner and greener transport, without creating a negative impact for the broader industry, including OEMs that manufacture as well as sell in the UK.

“As we enter the summer months, we are likely to see the traditional drop off in sales in the lead up to September, with a potential further impact as consumers focus on the holiday season, the Euros and the Olympics. The next few months will be crucial to OEMs in determining how they meet internal and external full-year targets, without negatively affecting profitability and long-term strategy.”