THE UK new car market recorded its fifth consecutive month of growth in December, with an 18.3% increase to reach 128,462 new registrations, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

This second half year performance was not enough, however, to offset the declines recorded during the first half of 2022. Despite underlying demand, pandemic-related global parts shortages saw overall registrations for the year fall 2.0% to 1.61 million, around 700,000 units below pre-Covid levels.

Constrained supply saw many manufacturers prioritise deliveries of the latest zero emission-capable models. December saw battery electric vehicles (BEVs) claim their largest ever monthly market share, of 32.9%, while for 2022 as a whole they comprised 16.6% of registrations, surpassing diesel for the first time to become the second most popular powertrain after petrol.

Meanwhile, plug-in hybrids (PHEVs) saw their annual share decline to 6.3%, meaning that combined, all plug-in vehicles accounted for 22.9% of new registrations in 2022 – a record high, although a smaller increase in overall market share than recorded in previous years. Hybrid electric vehicles (HEVs) also enjoyed growth, rising to an 11.6% market share for the year. As a result, average new car CO2 fell -6.9% to 111.4g/km, yet again the lowest in history.

While private buyers accounted for more than half of all registrations, fleets and business buyers were responsible for the lion’s share of battery electric vehicles, accounting for two thirds (66.7%) of all BEV registrations and 74.7% of the volume gain in 2022. Delivering the scale and speed of market transition required to meet climate change targets will require action to enthuse more private buyers to go electric.

Ensuring drivers in every part of the country can benefit depends on broader policies to encourage uptake of zero emission-capable vehicles during 2023. For instance, while the industry recognises the need for fair vehicle taxation, plans to introduce VED on BEVs from 2025 with the same ‘premium’ threshold as internal combustion-engine cars will disproportionately penalise those moving to electric.

Higher production costs mean more than half of all BEV registrations this year would have incurred the ‘premium’ VED if it had been in place, a move which risks discouraging wider adoption.

Chargepoint provision also remains a barrier to EV uptake. The government’s EV Infrastructure Strategy forecast that the UK would require between 300,000 and 720,000 chargepoints by 2030. Meeting just the lower number would still require more than 100 new chargers to be installed every single day. The current rate is around 23 per day.

Mike Hawes, SMMT Chief Executive, said: “The automotive market remains adrift of its pre-pandemic performance but could well buck wider economic trends by delivering significant growth in 2023.

“To secure that growth – which is increasingly zero emission growth – government must help all drivers go electric and compel others to invest more rapidly in nationwide charging infrastructure. Manufacturers’ innovation and commitment have helped EVs become the second most popular car type.

“However, for a nation aiming for electric mobility leadership, that must be matched with policies and investment that remove consumer uncertainty over switching, not least over where drivers can charge their vehicles.

“Looking ahead, supply chains are beginning to stabilise and although the shortage of semiconductors is expected to ease, erratic supply will likely impact manufacturing throughout 2023. The most recent market outlook, published in October 2022, anticipates around 1.8 million new car registrations in 2023, worth around £8.4 billion in additional turnover.”

A big winner in the sales market in 2022 was Kia UK which achieved more than 100,000 sales in one year for the first time in its 32-year UK history.

Delivering 3,450 new vehicles in December saw Kia’s full year sales result hit an all-time high of 100,191 for 2022.

The Korean car maker finished sixth overall in 2022, its highest position to date, posting an all-time best market share of 6.2%. With over 100,000 sales for the year and a record market share, Kia’s success bucks the 2022 market trend that saw significant challenges across the UK market.

Paul Philpott, President and Chief Executive, said:“Reaching 100,000 new car sales in 2022 is a significant milestone and testament to the hard work, determination and belief that each of our dealer partners have placed in Kia. It is also a time to say thank you to our dealers and our customers for their trust and loyalty.

“Since Kia first entered the UK car market 32 years ago, the brand has gone from strength-to-strength. Kia has continually thrived in a challenging market, our brand and products have evolved and perceptions have changed. Each of these have played an important role in Kia’s sustainable and organic growth.

“Now Kia is the 6th biggest car brand in the UK and a leader in electrification, with 43% of our vehicles sold in 2022 being electrified. And ambitious plans lie ahead as we continue to invest in electrified mobility and deliver customer-centric products and services.”

Commenting in the SMMT figures, Mark Oakley, Director of AA Cars, said: “New car sales ended the year on a high despite the current gloomy economic picture, finishing up with five straight months of rising vehicle registrations. 

“Although overall sales for the year still finished down on 2021, dealers will feel that they did well to bounce back from a sluggish start caused largely by supply shortages. 

“Electric Vehicles remain a bright spot with sales up 40% over the year, and this trend is likely to only grow further in the coming months. Further good news is that UK car production grew a further 5.7% in November, with a 18.3% rise in EV output.

“Despite this though, the new car industry still faces uncertain times in the new year. 
“Double-digit inflation continues to squeeze people’s ability – and willingness – to invest in big-ticket items like a brand new car. 

“We expect to see more drivers turn to alternative ways of accessing a car this year, with leasing becoming increasingly popular as its fixed monthly payments offer drivers financial certainty. 

“We’re also seeing a steady stream of traffic on the AA Cars website from consumers who are in the market for a used car, and can find a vehicle which suits any budget.”