New car sales dip, but electric has best ever month
New car sales failed to pick up last month despite the change of plate, though a record number of electric cars passed through showrooms.
March is the traditionally the best month for the trade, typically accounting for sales of 450,000 registrations, or 20% of the annual total.
But registrations of the new “22” plate were more than 14% lower on last year at 243,000, according to the Society of Motor Manufacturers and Traders (SMMT).
While the 2022 figures are the worst for March since 1998, it was the best month ever for battery electric cars, with sales up 78.7% to 39,315.
Sales of all electrified cars — battery electric, plug-in hybrid electric, hybrid electric and mild hybrid electric cars — now account for one in three registrations, as people take advantage of incentives and lower running costs for electric vehicles.
Buyers are steadily overlooking diesel cars, with their share of the market halving to just 10% or 25,000 vehicles delivered.
Overall registrations for the first quarter fell 1.9%, despite the easing of pandemic restrictions.
Large fleet registrations declined by 34.4%, but business registrations grew by 20% as manufacturers prioritised private consumer and smaller business orders.
The fall also reflects a tightening of consumer spending. The latest figures from car dealers show that the average cost of a new car is up 25% since the start of the pandemic, having risen by 14% in the last year alone to an average of £25,000.
The surge in prices his blamed partly on supply chain issues, particularly the shortage of semiconductors, itself an effect of the pandemic. Buyers are also paying higher rates of interest on loans.
Mike Hawes, the SMMT’s chief executive, said: “March is typically the biggest month of the year for the new car market, so this performance is deeply disappointing and lays bare the challenges ahead.
“While demand remains robust, this decline illustrates the severity of the global semiconductor shortage, as manufacturers strive to deliver the latest, lowest emission vehicles to eagerly awaiting customers.
“Placing orders now will be beneficial for those looking to take advantage of incentives and lower running costs for electric vehicles, especially as the Ukraine crisis could affect supply still further.
“With increasing household and business costs, government must do all it can to support consumers so that the growth of electric vehicles can be sustained and the UK’s ambitious net zero timetable delivered.”