UK car market to stay below pre-COVID levels

LONDON: Britain’s car market grew last year but is expected to remain permanently below the level it was at before the COVID-19 pandemic, an industry body said Friday. The number of new vehicles registered in the United Kingdom increased by around 17.9 percent in 2023, according to data from the Society of Motor Manufacturers and Traders (SMMT).

The group’s chief executive, Mike Hawes, described the rise as “very positive,” particularly in the “relatively negative economic context”.

Despite the year-on-year rise, the overall car market was 17.7 percent below pre-pandemic levels.

Hawes added that new registrations were likely to stay below 2019 figures, in part because workingfrom-home patterns had resulted in less commuting. The increase from 2022 -- when supply chains and deliveries were disrupted—came mainly from a 38.7 percent surge in large fleets of corporate vehicles. Vehicles purchased by private individuals stagnated at 818,000 units, which Hawes attributes to the rise in the cost of living and interest rates.

The number of new electric cars reached a record level last year of 315,000 units but their market share fell to 16.5 percent last year from 16.6 percent in 2022. Hawes said the UK’s market share for electric cars was “probably in the bottom half in Europe”, below nations such as France, Germany, Ireland and Portugal. He blamed a lack of incentives in Britain.

The SMMT wants the government to halve the VAT tax to ten percent on new electric car purchases for the next three years to try to boost sales.