Dealers benefited from the strongest September new car market since 2017 as private registrations rose 13.9%, but the reliance on discounts and incentives is putting the profitability of that growth in focus.
Preliminary SMMT figures show registrations increased 12.1% to 350,518 units during the plate-change month, marking a tenth consecutive month of growth.
Private buyers accounted for 149,158 registrations, giving dealers a stronger retail result in one of their most important trading periods.
However, the SMMT said overall growth was largely being driven by intense competition, particularly from new entrants, wider model choice and attractive deals.
The SMMT said those offers are also encouraging some buyers into new cars who might otherwise have bought used, creating an opportunity to convert more enquiries into new car sales.
Private demand strengthens
Private registrations represented 42.6% of September’s market. Fleet remained the largest channel, rising 9.6% to 190,988 units and accounting for 54.5% of registrations. The smaller business sector grew 37.6% to 10,372 units.
September typically accounts for around one in seven annual new car registrations, making its performance particularly important to dealers’ sales strategy.
Electrified vehicles took a record 58.4% of registrations, although performance varied considerably between powertrains.
Plug-in hybrid registrations increased 55.7%, reaching a record volume and a 17% market share. Conventional hybrid registrations fell 4.2%, reducing their share to 13.1%.
Battery electric vehicle registrations rose 36.3% to a record 99,199 units. BEVs accounted for 28.3% of the month’s market, up five percentage points year on year.
The SMMT attributed the electric car result to greater model choice, particularly in smaller segments, manufacturer discounts and the government’s Electric Car Grant.
There are now 178 BEV models on sale, more than double the number available in 2023, alongside more than 110 plug-in hybrids and 50 conventional hybrids.
EV target shaping fourth quarter
Despite September’s record, BEVs accounted for 26.2% of registrations in the first nine months, with 454,945 registered. That remains below the headline 33% ZEV mandate target for 2026.
Using its forecast of a 2.183-million-unit market, the SMMT calculated that around 265,000 additional BEV registrations would be needed in the final quarter to achieve a 33% share for the full year.
That illustrates the scale of the remaining sales challenge, although the overall market share is not a direct measure of individual manufacturers’ compliance, which is affected by regulatory flexibilities.
For dealers, the gap puts the fourth-quarter balance between EV volume, manufacturer support and profitability firmly in focus. September demonstrates that more choice and financial incentives can attract buyers, but does not show how demand would perform without that support.
Mike Hawes, SMMT chief executive, said: “September’s record EV performance is a major achievement. Drivers are increasingly embracing the growing choice of models made available and high fuel prices are also undoubtedly giving more consumers reason to consider going electric.
“The industry’s commitment is clear with billions of pounds of investment in new models, new technology and incentives.
“Despite all these factors, uptake remains behind mandated targets and, whilst flexibilities help, the UK still has the world’s toughest targets and highest energy costs. The mandate review is an opportunity to review those factors, to build on this momentum and support consumers but, in doing so, strengthen business viability and UK competitiveness.”
Commenting on the plate-change month, Ian Plummer, chief customer officer at Autotrader, said: “The volume of electric sales reflects the record electric interest we saw on Autotrader in August as this consumer demand converts into September sales. It also marks six consecutive months of new electric cars being the most popular fuel type on Autotrader, driven by the rising fuel costs we’ve seen since conflict erupted in the Middle East in Spring.”
Philip Nothard, insight director, Cox Automotive, added: “The increasing influence of Chinese manufacturers is impossible to ignore. Their growing presence is stimulating competition and a greater range of consumer choice. Still, it is also intensifying pressure on established brands, especially as the industry continues to work towards increasingly demanding EV targets.”
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