Record Car Sales in First Half of Year, But Private Demand Collapses amid Cost of Living Crisis

The automotive industry has seen a glimmer of hope as a million cars were sold in the first half of the year, marking a significant milestone since the pandemic began. However, the numbers are still a far cry from the pre-pandemic sales of 2019, with individual private buyers facing challenges amid a cost of living crisis.

According to data from the Society of Motor Manufacturers and Traders (SMMT), the overall new car market grew by 1.1% year-on-year, with corporate purchases driving the growth in June. Fleet purchases rose by 14.2%, while non-corporate retail demand continued to decline for the ninth consecutive month.

Private consumer market continues to shrink against a difficult economic backdrop, with retail sales accounting for just four in 10 new registrations last month. SMMT chief executive Mike Hawes emphasized the need for the government to implement policies that can re-energize the market and facilitate a faster transition to zero-emission vehicles.

One of the key challenges facing the automotive industry is the uptake of electric vehicles (EV). UK carmakers are legally required to have EVs make up 22% of sales by this year, but uptake has remained at 16% so far in 2024. This suggests that carmakers may face financial penalties for failing to meet the legal obligation.

The industry’s ability to meet the EV sales targets heavily relies on fleet purchases, with hybrid vehicles currently making up a combined 36.5% of new registrations. Mr. Hawes highlighted the importance of transitioning to electrified powertrains to cut carbon emissions and achieve environmental goals.

As the automotive industry navigates through challenges and transitions towards a more sustainable future, it is crucial for all stakeholders to work together to drive innovation and adoption of electric vehicles. Stay tuned for more updates on the evolving landscape of the automotive industry.