New car registrations increased 10.4% year on year in March, representing the industry’s 20th consecutive month of growth, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).
A total of 317,786 cars were registered across the country, with the growth attributed to the first plate changeover of the year (from 73 to 24) and continued fleet investment.
Although numbers rose year on year, registrations are still down 30.6% compared with pre-pandemic levels.
Registrations from private buyers also dropped by 7.7%, which, the SMMT said, was down to “a challenging economic backdrop of low growth, weak consumer confidence and high interest rates”.
Demand for petrol cars increased by 9.2% year on year, while plug-in hybrid and hybrid vehicles grew by 34.0% and 12.5% respectively. Diesel sales, meanwhile, fell by 5.3%.
Registrations of battery-electric vehicles (BEVs) rose by 10.6% year on year - the highest recorded levels to date, according to the SMMT - but the powertrain lost some ground in terms of market share, dropping 1.0% compared with February 2024.
The SMMT said the drop indicates a “need for government to support consumers to speed up fleet renewal”, as fleets are the biggest driver of BEV uptake.
“A tough economic backdrop makes it ever more challenging for consumers to invest in these new technologies,” the SMMT said in a statement.
Although car makers are offering incentives to support drivers in switching to all-electric power, the SMMT claims it’s not sustainable for the industry. The organisation suggested halving VAT on electric cars and abolishing ‘pavement penalties’ on EV chargers would “make a significant difference to consumers”.
SMMT boss Mike Hawes described the EV market as “sluggish” and indicated the government wasn’t doing enough to push the sale of zero-emission vehicles.
“Market growth continues, fuelled by fleets investing after two tough years of constrained supply," Hawes said. "A sluggish private market and shrinking EV market share, however, show the challenge ahead.
“Manufacturers are providing compelling offers, but they can’t single-handedly fund the transition indefinitely. Government support for private consumers – not just business and fleets – would send a positive message and deliver a faster, fairer transition on time and on target.”
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