Only a day before Chancellor Jeremy Hunt makes his latest Budget statement, the UK’s new car market has posted its record February performance in two decades.

With vehicles being big-ticket items, the sale of new motors often provides an indication of economic activity.

And the latest numbers show that car registrations rose 14 per cent to 84,886 units last month, the Society of Motor Manufacturers and Traders said.

However, closer scrutiny of the data shows that it is primarily fleets and businesses propping up the market – and the data shows that public demand for electric vehicles (EVs) is continuing to dwindle.

New car sales data for last month show the UK¿s new car market has posted its record best February for two decades

New car sales data for last month show the UK¿s new car market has posted its record best February for two decades

New car sales data for last month show the UK’s new car market has posted its record best February for two decades

SMMT figures show new car registrations rose 14 per cent to 84,886 units - the best since 2004

SMMT figures show new car registrations rose 14 per cent to 84,886 units - the best since 2004

SMMT figures show new car registrations rose 14 per cent to 84,886 units – the best since 2004

Last month was the highest February sales total of new cars since 2004, when more than 91,000 vehicles were registered, the automotive trade body confirmed.

This record month also marks the 19th of consecutive growth, bucking the trend of February traditionally being a low volume month due to buyers waiting until March for new number plate registrations.

The primary drivers of growth have been fleets investing in the latest vehicles, with businesses and fleets responsible for the entirety of February’s increase. 

Registrations for fleets were up over a quarter – 25.2 per cent – while businesses were up 15.5 per cent.

In stark contrast, private uptake has continued to struggle with a 2.6 per cent decline, with private sales now only making up a third (33.7 per cent) of the new car market share.

The UK new car market is growing very well, but it's bouyed by business and fleet sales which make up all the growth, as private sales are down -2.6 per cent

The UK new car market is growing very well, but it's bouyed by business and fleet sales which make up all the growth, as private sales are down -2.6 per cent

The UK new car market is growing very well, but it’s bouyed by business and fleet sales which make up all the growth, as private sales are down -2.6 per cent

Petrol cars represent the biggest total sales with battery electric vehicles (BEVs) representing the second highest sales segment

Petrol cars represent the biggest total sales with battery electric vehicles (BEVs) representing the second highest sales segment

Petrol cars represent the biggest total sales with battery electric vehicles (BEVs) representing the second highest sales segment

It’s a similar case with battery electric cars, with fleet uptake far outweighing that of purchases by regular motorists.

EV uptake outstripped the rest of the market, rising 21.8 per cent to a grand total of 14,991 registrations. This accounts for 17.7 per cent of total regs and is a nose ahead of last year’s 16.5 per cent share.

 Tackling the triple tax barrier as the market embarks on its busiest month of the year would boost EV demand, cutting carbon emissions and energising the economy   Mike Hawes, SMMT Chief Executive

However, private buyers account for less than one in five (18.2 per cent) of new EVs registered in 2024 so far – the increase on uptake is entirely due to fleets.

Despite January marking the one millionth EV to hit the road in Britain, public demand for battery cars has stagnated in recent months.

It couldn’t come at a worse time for car makers, with 2024 marking the first year the Zero Emission Vehicle Mandate (ZEV mandate) comes into play. 

The ZEV mandate requires 22 per cent of new car sales to be electric by the end of the year, with individual manufacturers facing £15,000-per car fines for every number below that threshold.

The SMMT’s records show that, on average, car makers are tracking around 4 percentage points below the target.

Ahead of Chancellor Jeremy Hunt's Budget tomorrow, the SMMT and other leading industry figures are calling on the Government to reduce taxation of electric vehicles and improve incentives offered to private buyers

Ahead of Chancellor Jeremy Hunt's Budget tomorrow, the SMMT and other leading industry figures are calling on the Government to reduce taxation of electric vehicles and improve incentives offered to private buyers

Ahead of Chancellor Jeremy Hunt’s Budget tomorrow, the SMMT and other leading industry figures are calling on the Government to reduce taxation of electric vehicles and improve incentives offered to private buyers

The SMMT is calling for ‘fairer’ taxation of EVs ahead of Wednesday’s Budget as private uptake continues to struggle.

Mike Hawes, SMMT Chief Executive, said: ‘The new car market’s ability to deliver growth continues with its best February for 20 years and this week’s Budget is an opportunity to ensure that growth is greener. 

‘Tackling the triple tax barrier as the market embarks on its busiest month of the year would boost EV demand, cutting carbon emissions and energising the economy. 

‘It will deliver a faster and fairer zero emission transition, putting Britain’s EV ambition back in the fast lane.’

A bridge of the gap between petrol and diesel and electric for many private buyers are hybrid cars, which also posted promising growth figures.

Steppingstone plug-in hybrids (PHEVs) had the largest proportional growth for the month rising 29.1 per cent to hit 7.2 per cent market share. Hybrids also rose 12.1 per cent but the year-on-year market share was slightly smaller at 12.7 per cent.

The Ford Puma was last year's best-selling new car, and the SUV is already the best-selling model of January and February this year

The Ford Puma was last year's best-selling new car, and the SUV is already the best-selling model of January and February this year

The Ford Puma was last year’s best-selling new car, and the SUV is already the best-selling model of January and February this year

The Tesla Model Y was last year's best-selling new electric car in the UK and is the only all-electric car to appear in the top 10 most popular new cars so far this year

The Tesla Model Y was last year's best-selling new electric car in the UK and is the only all-electric car to appear in the top 10 most popular new cars so far this year

The Tesla Model Y was last year’s best-selling new electric car in the UK and is the only all-electric car to appear in the top 10 most popular new cars so far this year

SUVs are hugely popular currently, it¿s not surprising that six out of 10 of the most popular cars last month were SUVs

SUVs are hugely popular currently, it¿s not surprising that six out of 10 of the most popular cars last month were SUVs

SUVs are hugely popular currently, it’s not surprising that six out of 10 of the most popular cars last month were SUVs

Ford Puma returns to the top of the sales chart 

The most popular models were the Ford Puma, and two Volkswagens: The Golf and the T-Roc. Considering the huge popularity of SUVs, it’s not surprising that six out of 10 of the most popular cars last month were SUVs. 

The Puma takes top spot this year to date, which puts it on an early trajectory to take best-selling car of the year for the second year in a row.

The Tesla Model Y – the best-selling new electric car of 2023 – was the only electric car to appear in the top 10. 

While there are still financial challenges for new car buyers to overcome in the current climate the outlook is positive and new car growth continues post-pandemic

Richard Peberdy, UK Head of Automotive for KPMG, said: ‘Ongoing pressure on household budgets and a higher cost of car finance mean that it’s still a difficult economic period for many people wanting to buy a new car, and a challenge for those trying to sell them. 

Overall, the UK market continues to hold up relatively well to this challenge, boosted by flowing supply of new vehicles, discounting on many forecourts, and export demand.’

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This post first appeared on Dailymail.co.uk

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