09 January 2023

The story of new car registrations in 2022 is a tale of what might have been, with supply constraints leaving increased consumer demand unsatisfied. Heading into the new year, while supply chains are beginning to stabilise and with the shortage of semiconductors beginning to ease, there is now uncertainty as to how the cost-of-living rise and an impending recession might hit the new car market.

Full year sales of 1,614,063 new cars left 2022 some 2% down on 2021, but saw Britain reclaim its position as Europe’s second largest new car market by volume, both overall and for plug-in cars. Looking ahead, the SMMT’s most recent forecast anticipates around 1.8 million new car registrations in 2023, believing that erratic supply of semiconductors will continue to impact manufacturing.

December’s picture was interesting in the continued, marked shift in the balance of registrations away from retail customers towards fleet. How much of this was a conscious reprioritising of fleet among the OEMs and how much a fall in demand from consumers is unclear, but a 7.4% decline in private registrations from 56,606 to 52,413 was a marked contrast to the 42.9% rise in fleet registrations from 48,786 to 69,702.

For the full year, private registrations finished up 2.0% on 2021, whereas at the half year point they had been 4.2% up. Fleet, in contrast, finished the year 7.5% down, recovering from 26.4% down mid year.

December saw battery electric vehicles claim their largest ever monthly market share, of 32.9%, while for 2022 as a whole they comprised 16.6% of registrations, surpassing diesel for the first time to become the second most popular powertrain after petrol.

Meanwhile, PHEVs saw their annual share decline to 6.3%, meaning that combined, all plug-in vehicles accounted for 22.9% of new registrations in 2022 – a record high, although a smaller increase in overall market share than recorded in previous years. Hybrid electric vehicles (HEVs) also enjoyed growth, rising to an 11.6% market share for the year.

Winners and losers

A surge in registrations for Volkswagen in December saw it jump ahead of Ford to finish the year as the UK’s leading brand, outselling Ford by some 5,000 units. But it still finished the year down 10.81% on its 2021 performance. Ford, in contrast, finished the year 9.05% up.

Audi and BMW enjoyed similarly strong ends to 2022, but the full year figures for both are below their 2021 levels, and both have lost market share. Premium rival Mercedes was some 21% down in December and finished the year over 17% down, losing close to 1% market share in the process.

An 18.8% surge in December was enough to get Kia over the line in its goal to achieve 100,000 UK registrations for the first time, which it surpassed by 191 units, finishing the year 10.32% up. Sister brand Hyundai’s registrations were flat in December, meaning it finished the year 15.41% up over all. Both have increased their market share in the order of 0.7%.

The three big winners for 2022 were Tesla, MG and Dacia. Tesla registrations were up over 70% in December, and it was the biggest seller in the month with 16,368 units. For the full year it was ahead some 57% on 2021, and grew its market share by 1.26%. With its rapidly growing parc, it will be interesting to see how it manages its aftersales operation in 2023.

The same might be asked of MG, which has also grown rapidly in the last few years and where some commentators are now asking whether its parts supply will be sufficient to meet its aftersales needs. In absolute figures, MG’s December registrations were up almost 16% on 2021, and full year were up almost 67% at 51,050. This represented at 1.3% gain in market share to 3.16%.

Looking at the performance of some of the groups, Volkswagen, Audi, Seat and Skoda all finished the year well behind the average fall of 2.01%. Only Cupra showed any growth, but when you add its figures back into Seat for the full year and compare with 2021, the combined brand and sub-brand still finished the year significantly down.

Within Stellantis, only DS and Alfa Romeo finished the year ahead of 2021, but the numbers are so small as be almost inconsequential.

An interesting brand to follow through 2023 will be Ora, which achieved total sales of 68 units in its first three months of availability of the Funky Cat. 2023 should see the brand gain traction in terms of its recognition, but how will that translate into sales is something of an unknown, and its price and range seem less compelling than some rivals.

Zero emission growth

SMMT chief executive Mike Hawes said: “The automotive market remains adrift of its pre-pandemic performance but could well buck wider economic trends by delivering significant growth in 2023. To secure that growth – which is increasingly zero emission growth – government must help all drivers go electric and compel others to invest more rapidly in nationwide charging infrastructure.

“Manufacturers’ innovation and commitment have helped EVs become the second most popular car type. However, for a nation aiming for electric mobility leadership, that must be matched with policies and investment that remove consumer uncertainty over switching, not least over where drivers can charge their vehicles.”

Anticipating that new electric vehicle sales would reach a new peak by the end of 2023, Jamie Hamilton, automotive partner and head of electric vehicles at Deloitte, echoed the need for improved charging infrastructure: “For battery electric vehicles to become truly mainstream, there is still a way to go in order for charging infrastructure to keep up with demand. Whilst moves are being made to do so, the charging infrastructure in the UK is fragmented and can be complicated to access.

“In terms of charge point volumes, it will be important to create charging accessibility parity between those drivers with a driveway, and those without. At that point, the practicality of switching to fully electric becomes a viable option for all.”

Tags: Dacia, Deloitte, Ford, Jamie Hamilton, January 2023, Kia, MBW, MG, Mike Hawes, registrations, SMMT, Tesla, Volkswagen