EY Comments on June 2024 SMMT New Car Registration Figures

June 2024 SMMT new car registration figures
EY comments on June 2024 SMMT new car registrations marking 23 months of growth as fleet sales increase and private demand falls

The Society of Motor Manufacturers and Traders (SMMT) has released the new car registration figures for June 2024.

David Borland, EY UK & Ireland Automotive Leader, provides insight into the automotive industry's sentiment, highlighting its challenges despite ongoing new car sales growth.

David Borland, EY UK & Ireland Automotive Leader

Fleet sales drive growth

However, David highlighted that fleet sales remain the primary driver of this growth, with a 14.2% year-on-year increase in June.

In contrast, demand from private retail consumers saw a ninth consecutive decline. He further notes, "The auto industry's persistent resilience and achievements should be recognised, but the complex challenges it continues to face, particularly in the retail market, should not be downplayed."

Mike Hawes, Chief Executive, SMMT

Mike Hawes, SMMT Chief Executive, said.

"The year's midpoint sees the new car market in its best state since 2021 – but this belies the bigger challenge ahead.

"The private consumer market continues to shrink against a difficult economic backdrop.

"Still, with the right policies can re-energise the market and deliver a faster, fairer zero-emission transition.

"All parties agree on the need to cut carbon and replace older fossil fuel-based technologies with new electrified powertrains, which is essential to achieving that goal."

BEV growth and regulatory challenges

Despite a 7.4% year-on-year growth in Battery Electric Vehicle (BEV) sales in June, the year-to-date market share for BEVs is still below 17%.

This is significantly short of the 22% required to meet the Zero Emissions Vehicle (ZEV) Mandate.

David pointed out that petrol and diesel sales also declined last month, a trend expected to continue as Original Equipment Manufacturers (OEMs) reduce Internal Combustion Engine (ICE) vehicle sales to comply with the ZEV Mandate.

Summary of June 2024 SMMT new car registration figures

Navigating regulatory landscapes

David emphasised the importance of careful consideration for future regulations such as the ZEV Mandate.

"Manufacturers and other organisations in the automotive ecosystem need support to navigate these regulations.

"This impacts all parts of the value chain, including suppliers, retailers, and fleet operators.

"Upstream and downstream partners must adapt their portfolios in a dynamic market," he explained.

Significant challenge ahead

Looking ahead, David cautioned that if total vehicle sales continue on the same trajectory for the rest of the year, OEMs will need to sell 440,000 vehicles to comply with the ZEV Mandate.

"With only 167,000 ZEVs sold in the first half of 2024, there's a significant challenge ahead," he warned.

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In conclusion, while the growth in new car registrations is a positive sign for the UK automotive sector, it comes with its own set of challenges.

The industry must navigate complex regulatory landscapes and shifting consumer demands, particularly in the push towards zero-emissions vehicles.

The focus on fleet sales, the need for increased BEV adoption, and the impending ZEV Mandate compliance present both opportunities and hurdles.

The industry's resilience and adaptability will be critical in maintaining this growth momentum and achieving long-term sustainability.

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