THE UK new car market grew by 9.5% in November to reach 156,525 units, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

In the market’s best November for four years, registrations almost returned to pre-pandemic levels, down just 96 units (0.1%) on 2019.

Growth was driven entirely by fleets investing in the latest vehicles, with registrations rising 25.4% to account for 93,049 units and 59.4% of the market. Private demand was depressed, dropping -5.9% to 60,506 registrations, while business uptake fell 32.7% to 2,970 units. Year to date, however, the overall market remains up 18.6% at 1.762 million units, with a return to growth in the corporate market fuelling a recovery that has been underway for 16 months.

November proved a strong month for both hybrid electric vehicles (HEVs) and plug-in hybrid vehicles (PHEVs), rising by 27.8% and 55.8% respectively. Fleets also continued to transition to battery electric vehicles (BEVs), buoyed by compelling tax incentives.

Of the 24,359 new BEVs reaching the road in November, 77.4% were taken on by fleets and businesses. While overall BEV volumes fell by -17.1%, leading to a reduced market share of 15.6%, last November was atypical with significant deliveries following supply chain disruptions. Year to date, BEV uptake is up 27.5% with a 16.3% market share – expected to rise to 22.3% next year.

However, with new regulation coming into force in January mandating that 22% of each manufacturer’s new vehicle registrations must be zero-emission, sustained recovery depends on inspiring consumers with fiscal incentives, as well as greater investment in essential charging infrastructure that gives drivers confidence. Halving VAT on new BEVs and reducing VAT on public charging to 5% in line with home charging would increase the attractiveness of driving electric and make the zero emission transition more accessible to a larger number of consumers.

Even more urgent is the need to delay tougher new UK-EU Rules of Origin which will begin on 1 January 2024. Failure to postpone these rules would see EVs traded both ways incur tariffs that would raise prices for consumers at a critical moment in the transition. With less than four weeks to go, carmakers and governments on both sides of the Channel have called for a common sense approach to retain the current EV battery rules for a further three years, which will support consumer choice and affordability.

Mike Hawes, SMMT Chief Executive, said: “Britain’s new car market continues to recover, fuelled by fleets investing in the latest and greenest new vehicles. With car makers gearing up to meet their responsibilities under new market legislation, and COP28 currently underway, now is the time to take sensible steps that will multiply that economic growth and minimise carbon emissions. Private EV buyers need incentives in line with those that have so successfully driven business uptake – and workable trade rules that promote rather than penalise the transition.”

Mark Oakley, Director of AA Cars, added: “The new car market is navigating the tricky economic backdrop with all the skill of an experienced driver dodging the potholes and powering smoothly through the bends of a winding country road.

“The market’s incredible, uninterrupted run of rising sales has now extended into a 16th straight month, showing the strength not just of driver demand but also of supply, as manufacturers and dealers work together to keep up with customer orders.

“The figures are a striking reminder of Britons’ continued willingness to commit to big ticket purchases like a car, even as they cut back spending elsewhere. They come after ONS data showed that retail sales volumes fell by 1.1% in the three months to October.

“Meanwhile the number of new cars rolling off UK production lines in October was up 31.6% compared to the same month last year, confirming that the component shortages which held back supply in 2022 are firmly behind us.

“This free-flowing new car market is powering up used car sales too. For each driver replacing their current car with a brand new model, another car makes its way onto a second-hand dealer’s forecourt. Many of these models will be nearly-new, offering fantastic value to drivers working within budget constraints.

“With inflation falling sharply and signs that interest rates may have peaked, a gradual easing of the pressure on personal finances should help the new car market continue its growth trajectory into the new year.”

 Jon Lawes, Managing Director at Novuna Vehicle Solutions, one of the UK’s largest fleet operators, said that the £2bn announced in the Autumn Statement to aid zero-emission vehicle manufacturing, combined with the UK’s first ever battery strategy and a promised consultation on fast-tracking charging infrastructure, have all been encouraging steps for the UK’s EV transition.

He added: “However, the OBR is still predicting a dramatic fall in EV uptake and with the clock ticking on incoming tariffs, this poses a threat to UK vehicle manufacturing and undermines the commitments in last month’s budget.”

John Wilmot, CEO of car leasing comparison site LeaseLoco added: “November’s new car registrations were underwhelming, despite a 9.5% increase in sales last month marking a 16th straight month of growth.

“This rise primarily stemmed from large fleet registrations, juxtaposed against a notable 5.9% decline in private registrations compared to the previous year. The striking downturn in electric car sales is concerning, breaking a streak of 42 consecutive months of growth.

“This dip puts added pressure on the government to revitalize the EV market, especially after missing an opportunity in the latest Autumn Statement.

“The Chancellor had a crucial chance to introduce incentives and lead infrastructure investment, signaling strong support for drivers and emphasising the opportune moment for transitioning to electric vehicles. Sadly, that opportunity slipped by.”