UK car sales data from August revealed worrying signs of decline after consumer demand dropped by 8% compared to the same month last year, says The Car Expert.
The latest analysis of car sales data, released today by the Society of Motor Manufacturers and Traders (SMMT), shows that sales were up 24% in August 2023 compared to the same period last year.
But despite sales rising by nearly a quarter in August – propped up by strong fleet sales as they claw back lost ground following significant supply issues – private buyers have been far less willing to shell out for new cars due to continuing uncertainty, rising prices and higher interest rates. It was the worst August result for private new car sales since 2012.
With 12 consecutive months of growth for fleets, businesses which need to purchase cars have been buoyed by improved supply after manufacturers favoured consumer sales where profit margins are higher.
Electric vehicles saw substantial growth in the month of August, though typically a quiet period for new car sales before the plate change in September, 1-in-5 new cars sold was a fully electric vehicle.
Stuart Masson, Editorial Director at The Car Expert, said: “On the face of it, new car sales rocketed in August; the reality is that there are plenty of warning signs that the market is not necessarily in rude health. Consumer demand has fallen substantially, and August is not a one-off. The cost of living crisis and rising interest rates are ongoing concerns.
“It is positive that businesses are buying cars in consistently higher numbers. This will start to help used car buyers who should see prices finally coming down as fleets dispose of their existing vehicles. It also shows that confidence is returning, however, they are simply trying to catch up to where they would’ve been after being ignored by manufacturers during 2020 and 2021.
“There will be some relief that EV sales have improved after flatlining for most of this year. But we must be cautious because August is the second lowest month for sales after February and the abnormally high proportion of fleets sales will skew electric car sales upwards. The industry and those in government who set the 2030 target will be hoping for a similar if not even better performance throughout the remainder of the year.”
Sales of diesel cars represented just 6.5% market share, with sales expected to limp along in the very low single figures in the run up to 2030.