The gradual return of the private buyer to the new car market helped to push up sales as number plates changed in March.
Car registrations were up more than 12 per cent last month at 357,000. That took the total new car sales for the first quarter to 580,000, 6 per cent higher than in the first three months of 2024.
Private buyers — as opposed to those cars sold to fleets or businesses — made up more than 41 per cent of the market. While that level remains historically low, it is a recovery from some months over the past two years as people baulked at the inflated prices manufacturers were attempting to push through.
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The strong numbers of buyers in March also appeared to reflect a shift in demand for vehicle types and how they are powered. Sales of petrol cars now account for less than half of the market.
While government policymakers have focused on demanding that consumers buy fully-electric zero-emission cars, many consumers appear to have responded by choosing hybrids instead — which are partly battery-powered but also carry petrol engines.
Sales of fully electric cars hit a new monthly record, up 42 per cent year-on-year to 69,000 in March and 120,000 for the first quarter. However, plug-in hybrids were up 38 per cent and hybrids were up 28 per cent, with the result that hybrids now account for more than 25 per cent of the market.
The popularity of hybrids diluted the market penetration of fully electric vehicles to less than 20 per cent in March and only a little over 20 per cent for the first quarter. That is a crucial number, since under the zero-emission vehicle (ZEV) mandate quota rules — inherited by Labour from the previous Conservative government — manufacturers have to sell 28 per cent of their cars as zero emission in 2025 or face fines of up to £15,000 for every car under the threshold.
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In reality, the 28 per cent figure is lower for manufacturers such as Toyota that already sell lower emission technologies. In any case, Labour is reviewing the ZEV mandate and the rules seem likely to change.
The new car data is collated by the Society of Motor Manufacturers and Traders (SMMT), the official industry body. It believes that sales of electric cars were inflated artificially by carmakers cutting prices to hit targets and by a rush to beat the new “expensive car supplement” that came in this week. The supplement adds more car duty to vehicles priced at more than £40,000 and hits electric models disproportionately.
“Manufacturers remain committed to the market decarbonisation that the country and the environment demands but we need sustained growth, not a short-term bubble driven by unsustainable manufacturer discounting and drivers rushing to beat a tax hike,” said Mike Hawes, chief executive of the SMMT.
Hawes said he believed that the government’s review of the ZEV mandate needed to reflect the “natural demand” for electric cars, which the latest figures appear to indicate is lower than the policymakers previously thought.
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