Consumer new car sales flatline in 2023 as cost crunch hits home

Confident salesman showing car to female customer while working standing in showroom

Sales of new cars to consumers flatlined in 2023 due to the ongoing cost of living crisis, while sales to fleets enjoyed year-long growth, says The Car Expert.

Last month was the worst December for private new car sales since 2008, which was the middle of the great financial crisis.

The new car sales data for December released today by the Society of Motor Manufacturers and Traders (SMMT) reveals that the UK market grew by 18% across 2023 compared to 2022.

The surge, however, is entirely driven by fleets rather than private customers. Sales to fleets made up two-thirds of all new car registrations in December, with growth of 33% while private new car sales slumped by 14% compared to the same month last year.

Despite encouraging signs of an increase in demand compared to 2022, sales of EVs stalled in 2023, and their market share shrank slightly to 16.5%.

The cost-of-living crisis and mixed messages from the UK government, alongside vocal anti-EV commentators, have dampened the UK’s appetite for electric cars.

Stuart Masson, Editorial Director at The Car Expert, said: “2023 threw up two worrying trends for new car sales. Firstly, overall market growth was entirely down to fleet purchasing, while consumer sales flatlined. Private customers simply aren’t buying new cars, which will be creating big headaches for the car industry.

“Secondly, market share for electric vehicles also failed to spark, largely because consumers are clearly reluctant to make the switch to electric power. Both the government and the car industry need to see a big uplift in EV sales in 2024 with the introduction of the tough new ZEV mandate, but customer demand simply doesn’t appear to exist, which is a big concern.

“We’re calling for the government to get on the front foot by introducing a far-reaching education campaign to help consumers understand why EVs are a perfectly viable choice for the vast majority of UK households, and a better economic choice for the long term. This will help give buyers confidence and may cut through a lot of the nonsense from the naysayers.”

The government ZEV mandate means that this year 22% of all new cars sold by car manufacturers must be zero emission. However, EV sales represent just 16.5% of the market in 2023 – below last year’s market share. To achieve the mandated goals, sales of EVs must increase by a third over 2023 levels.

Some manufacturers may decide to pause sales entirely rather than pay fines for missing the EV sales mandate. This would clearly be incredibly disruptive and could threaten the very survival of some brands.

Leave a Comment

Your email address will not be published. Required fields are marked *

Scroll to Top