CEO Update

October optimism for new car market as recovery set to continue in 2023

04 November 2022 #CEO Update

In the week we wound back the clocks, drawing an end to British Summer time, October’s new car registrations offer some light, posting the market’s third month of consecutive growth. And it was considerable growth at that, with registrations up more than a quarter signaling that recovery is finally on the horizon.

Less positive were the monthly results for the light commercial vehicle sector, where deliveries fell after a brief rebound in September, marking the lowest October for the UK’s van market since 2013. In good news, however, electric van registrations saw a 52.5% increase as buyers continued to opt to reduce their carbon footprint and running costs.

The same enthusiasm is evident in the car market, with electrified vehicles accounting for one in three registrations last month. It’s a trend we need to see accelerating, and although growth continues, there are signs its pace is slowing. Year-on-year battery electric car market share for the month declined, albeit marginally, in October, for the first time since May 2021.

Amid ongoing component shortages, expected to ease into 2023, and the developing cost of living crisis, the 2022 market outlook for both cars and vans has this month been downgraded, including for battery electric vehicles. However, ongoing demand for electric vehicles is expected to result in a record plug-in market share of 21.9% for cars and 6.1% for pure electric vans, with further growth anticipated in 2023.

The continuing growth of electric vehicles has emphasised that increasing public chargepoint provision must be a priority. However, latest analysis shows that the current rate of infrastructure rollout puts government ambition at risk. During the first three quarters of 2022, one new standard charger was installed for every 50 new plug-in EV registrations. While this is broadly on par with 2020 and 2021, government’s ambition is for 300,000 public chargepoints in operation by 2030 – and as of the start of October, we have 34,637, so clearly rollout needs to accelerate.

The Autumn Statement in two weeks’ time gives the government its first major opportunity to provide much needed confidence to both businesses and consumers. By implementing measures to mitigate rising energy costs in the longer term and offering fiscal commitment to help stimulate demand and investment for zero emission motoring, the UK will be better placed to reach ambitious net zero goals.

Finally this week, electrifying the UK automotive supply chain was a key theme at SMMT Meet the Buyer, which supports British automotive manufacturing by matching buyers with suppliers to develop valuable business connections. The event hosted more than 140 meetings, with buying organisations ranging from vehicle manufacturers to Tier ones and startups. Continuing the success of last year, it was well received as attendees benefited from networking and the creation of new business opportunities, which are particularly important at this time of economic upheaval.

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