UK new car registrations decline in April amid tax changes and market adjustments

Image Source : The Economic Times

The UK automotive market saw a notable decline in new car registrations in April, with figures dropping by 10.4% year-on-year to 120,331 units. The Society of Motor Manufacturers and Traders (SMMT) attributes this downturn to recent tax adjustments and shifting consumer behavior.

Key highlights

Market performance and decline
New car registrations fell by 10.4% compared to April last year, marking the sixth decline in the past seven months.

Impact of tax changes
The introduction of Vehicle Excise Duty (VED) changes, including the Expensive Car Supplement now applicable to electric vehicles, contributed to the slowdown. Many buyers rushed to complete purchases in March to avoid the tax hike.

Consumer trends and EV market shift
Battery electric vehicles accounted for 20.4% of new registrations, an increase from 16.9% a year earlier, though still below the Zero Emission Vehicle Mandate target of 28 percent. Meanwhile, petrol and diesel car registrations fell by 22.0 and 26.2 percent, respectively.

Industry response and calls for support
The SMMT has urged the government to introduce incentives to boost electric vehicle adoption, including VAT reductions and equalizing public charging costs with home charging rates.

Future outlook and market adjustments
Despite the decline, the industry remains optimistic about long-term growth, with manufacturers continuing to expand electric vehicle offerings and adjust pricing strategies to align with evolving regulations.

Sources: Car Dealer Magazine, SMMT, MarketScreener