Deloitte comments on SMMT new car registration figures has been saved
Deloitte comments on SMMT new car registration figures
04 August 2022
Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte, said:
“New car registrations fell by -9% this month, marking the fifth consecutive month of decline. This has been driven by flat private sales and a decrease in the volume of fleet sales (-18%) as manufacturers have prioritised the former, and supply constraints have continued to drag on the market.
“At the same time, CFOs expect a recession within the next 12 months and are taking a more defensive balance sheet stance. As a result, fleet purchases are likely to have become less of a priority.
Deloitte Consumer Tracker: 5% of UK consumers intend to purchase a car in Q3
“Despite record low consumer confidence and the ongoing cost-of-living crisis, demand among some consumers wanting to purchase a new car has yet to dampen. Around 5% of UK consumers intend to purchase a car in Q3, which remains consistent with expected levels of demand.
“Dealers will take solace in the fact that pent-up demand and the current timeframe associated with buying a new car mean that many of them have been able to fill their order books for the remainder of this year.
“Attention is now turning to the sector’s prospects for 2023. With inflation expected to rise further, there is a very real risk that more consumers will find themselves unable to afford big-ticket purchases. Some may simply decide it is not the right time to buy a car – new or used. As a result, dealers will have to be even more savvy with their range of available vehicles. For example, adapting stock to cater to buyers looking for smaller, cheaper and more economical vehicles.
Record fuel prices drive more consumers towards electric
“Despite ongoing struggles experienced across the sector, battery electric vehicles continue to grow in popularity; up 50% in July compared to the same period last year and capturing 14% of the total new car market. However, at the same time sales of plug-in hybrids fell by 15%.
“This can be explained, in part, by some manufacturers prioritising the production of battery electric vehicles as semiconductor supplies remain constrained. Record fuel prices are also encouraging consumers to consider more seriously the switch to fully electric.
“Many new EVs remain substantially more expensive than their petrol or diesel comparable, and cost remains a major factor for consumers. The removal of financial incentives in other markets has supressed demand and many expect the same for EVs with the removal of plug-in vehicle grants. However, as well as being able to make major savings on fuel, maintenance costs for EVs are also relatively lower compared to combustion engine vehicles, as EVs have fewer moving parts and no need for regular oil and filter changes. In addition, there are substantial tax savings still available when purchasing an EV through a benefit-in-kind company car scheme.”
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