Fleets drive UK's strong new car demand in February

London – The UK new-car market recorded its “best February performance for two decades” as registrations rose 14.0% year-on-year to 84,886 units, the Society of Motor Manufacturers and Traders (SMMT) has reported.

The strong performance marked 19 months of consecutive growth, primarily driven by fleets investing in the new vehicles, said SMMT 5 March.

Fleets and businesses were responsible “for the entirety of February’s increase”, with year-on-year registrations up 25.2% and 15.5% respectively.

Private uptake, meanwhile, “continued to struggle” with a 2.6% decline to record a 33.7% market share.

According to SMMT, February is traditionally volatile as the lowest volume month of the year, with buyers often choosing to wait until March and the new number plate.

During the month, electrified vehicles recorded robust growth, with hybrid electric vehicles (HEVs) rising 12.1%, but taking a marginally smaller year-on-year market share of 12.7%.

Plug-in hybrids (PHEVs) recorded the largest proportional growth for the month, rising 29.1% to reach 7.2% of the market.

Battery electric vehicle uptake similarly outpaced the rest of the market, rising 21.8% to account for 17.7% of registrations, up from 16.5% last year.

Despite February’s growth, SMMT said the “long-term picture” of the market will become clearer in March, which is traditionally the busiest market month.

SMMT noted the major role of fleets in the BEV market share and volume growth, adding that private buyers account for fewer than one in five (18.2%) of new BEVs registered in 2024 so far.

“A faster, fairer market transition depends on more private buyers switching but the lack of significant incentives is holding back many,” it added.

According to SMMT, consumers do not pay VAT on emission reduction technologies such as heat pumps and solar panels, but they pay “the full 20%” levied on all cars, whether they be electric, petrol or diesel.

“Halving VAT on new EV purchases would save the average buyer around £4,000 (€4,700) off the upfront purchase price,” it added.