UK car registrations rise YOY in February, business and fleet sales drive growth
By Iain Gilbert
Date: Tuesday 05 Mar 2024
(Sharecast News) - New car registrations rose 14.0% to 84,886 units last month, according to the Society of Motor Manufacturers and Traders, delivering the best February performance since 2004.
Total registrations, including business and fleet sales, totalled 84,900, above February 2023's 74,400 and the 81,200 2015-19 average for the month.
However, private new car registrations came to 28,600 last month, below both last year's reading of 29,400 and the 35,300 February average between 2015 and 2019. February has traditionally been volatile, with the lowest volumes of the year, as buyers often opt to hold out until March and the new number plate.
February marked the 19th month of consecutive growth, primarily driven by fleet sales, with fleets and businesses responsible for the entirety of February's increase as registrations were up 25.2% and 15.5%, respectively.
Hybrid electric vehicle registrations rose 12.1%, but took a marginally smaller year-on-year market share of 12.7%, while plug-in hybrids recorded the largest proportional growth for the month, rising 29.1% to reach 7.2% of the market. Battery electric vehicle increased 21.8% to account for 17.7% of registrations.
"Private car sales are stagnant; they were 18.9% below their average February level in the second half of the 2010s. That's a smaller shortfall than January's 29.8% and the average across 2023, 21.5%, but February is the quietest month of the year for private car sales so we can't read much into this month's data alone. The twelve-month average of monthly private registrations remained at 67,000 in February, some 29% below the average in the second half of the 2010s," said Pantheon Macroeconomics' Rob Wood.
"The drop in the major purchases balance of GfK's survey in February to the lowest in five months suggests car sales will remain weak in the next few months. Looking further ahead, however, we expect car sales to recover. The decline in markets' expectations for Bank Rate since last summer suggests the cost of car finance will ease. Car dealerships also should benefit from the ongoing recovery in real incomes, as growth in average weekly earnings outstrips CPI inflation and likely personal tax cuts in tomorrow's Budget help disposable incomes. Note too that the underperformance of sales over the past three years suggests replacement demand will be strong over the coming years."
Reporting by Iain Gilbert at Sharecast.com
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