New car registrations by larger fleets surged 40.9% in March, helping the market to return to a pre-pandemic high.

The rise in fleet registrations was a key driver of March’s new car market growth

Deliveries to fleets with 25+ vehicles rose by 40,651 units during the crucial ‘new plate month’, reaching a total of 140,002 and giving an overall 48.6% market share.

The increase was a key driver of March’s growth in the overall new car market, which bounced back by 18.2% to deliver the best ‘new plate month’ performance since before the pandemic, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

Private registrations were also up – but by a much smaller 1.4%. Meanwhile, new car take-up by businesses with fleets of fewer than 25 vehicles rose 26.0%.

Alongside rocketing fleet demand, March was also marked out as the biggest month in history for battery electric vehicle (BEV) uptake with 46,626 units registered – up 18.6%. But overall, the BEV market share remained almost the same as last year at 16.2% and while plug-in hybrid (PHEV) registrations grew by 11.8%, plug-in registrations as a whole comprised 22.4% of the market – a slight decline on 2022.

The biggest growth was in hybrids (HEVs), which climbed 34.3%, meaning electrified vehicles accounted for more than one in three registrations for the month.

However, petrol-powered vehicles, including mild hybrids, still remained the most popular fuel type, comprising 56.3% of new units. Diesels declined 19.9% further and took just a 10.4% share.

Year to date, the first quarter of 2023 is the strongest since 2019, with just under half a million new cars (494,260 units) joining the road. But it’s still a significant drop on pre-pandemic levels, down 29.5% on Q1 2019 – and some have warned there’s a big gap to go.

The SMMT also warned that last week’s announcement of a final consultation on the ZEV mandate – ­due to come into force in less than nine months – means the market will have to move more rapidly to battery electric and other zero tailpipe emission cars and vans. It also cautioned that the charging infrastructure will need to be there for consumers to have confidence to switch.

Mike Hawes, SMMT chief executive, said: “With eight consecutive months of growth, the automotive industry is recovering, bucking wider trends and supporting economic growth. The best month ever for zero-emission vehicles is reflective of increased consumer choice and improved availability but if EV market ambitions – and regulation – are to be met, infrastructure investment must catch up.”

Still some way to go on charging infrastructure

UK automotive and fleet stakeholders greeted March’s “encouraging” figures, in particular for EV take-up, but echoed the SMMT’s comments on the need for a ramp-up in charging roll-out to support the ZEV mandate.

Jon Lawes, managing director, Novuna Vehicle Solutions, said: “We are seven years out from the Government’s 2030 target and the additional funding announced [last week] for EV infrastructure is just not enough to transform the charging  provision nationwide, which is woefully inadequate. Our own research shows that the UK will need to put 30,000 new charging points in the ground every single year for the next seven years, to meet the demand. That’s a tenfold increase in the number achieved in the past decade.

“What we need to see is a sustained, joined up approach at government and local authority level, to deliver tangible action and at pace,  to hit these targets and retain confidence in the industry and the market.”

Kim Royds, EV director at British Gas, concurred, saying: “Despite advances in EV uptake over the past few years, there is still some way to go to ensure charging infrastructure is accessible, user friendly and utilising the latest charging and payment technologies.

“The Government’s ZEV mandate consultation is an important commitment to an electric future, but as always, the devil is in the detail. Motorists and manufacturers also need it to go hand in hand with greater investment in establishing a full and proper charging network if we’re to get all transport in the UK carbon-free.”

Accountancy giant EY also warned that the UK auto sector needs further support for its net zero ambitions after the US announced a $2tn package for infrastructure, including its flagship $370bn Inflation Reduction Act and incentives for new car buyers.

Manu Varghese, from EY’s UK & Ireland Advanced Manufacturing & Mobility Team, said: “With the UK car industry facing competition both in the domestic and export markets, UK-based OEMs require further support to be competitive. Asia and North America are providing political and economic backing for their automotive sectors, strengthening their investment prospects – something the UK car market could benefit from.”