Many of us now think about the impact our day-to-day lives have on the world we live in, and with this comes the question of the methods we use to get from A to B. Over the last 100 years, the car has become an integral part of lives across the globe, from the busy streets of New York City to remote communities in the toughest terrain. In recent times, however, the car has become the focus of efforts to reduce our carbon footprint.
Recent Announcements
After first announcing that there would be a ban on the sale of new Petrol or Diesel vehicles in the UK in the year 2030, the government pushed this back to 2035, most likely due to doubts about the infrastructure supporting EVs (Electric Vehicles). It would also appear that these reservations are shared with consumers, and with the ease of pressure to transition from fossil-fuelled vehicles, many people are delaying making the switch. These factors could be the main contributors to the 7.7% fall in private car sales in March of this year, but with these concerns not being as relevant to fleet buyers, this sector saw growth.
Battery Electric Vehicles
Although sales of Battery Electric Vehicles (BEVs) were up 3.8% in March in comparison to the previous month, this is misrepresentative. When compared to overall market growth, this is a proportional shrink in demand. In a statement from Sue Robinson, the chief executive of the National Franchised Dealers Association (NFDA), it was disappointing to see the lack of support from the UK Government for new BEV sales, such as price incentives, in the run-up to the Zero Emissions Vehicles (ZEV) mandate. When looking at the overall market share that BEVs hold, in March it stood at 15.6%, the figure for the whole of 2024 to date is 15.5%, suggesting a plateau in buyer demand.
Electric Charging Points
To try and boost sales of BEVs, the SMMT is pushing for a halving of VAT on the purchase price of these vehicles. With the rising costs of charging in public also becoming a concern of current and prospective owners, they are also calling for a reduction in the VAT on public charging points, to bring it in line with the 5% which owners currently pay when plugging in at home.
While government-backed incentives may be lacking, OEMs are pushing to win over buyers and boost sales figures so they can meet the ZEV mandate and avoid penalties. Ian Plummer, the commercial director at Auto Trader recently said “…more than three-quarters of new EVs are now advertised on our website with discounts, with the average discount applied increasing to 11%…” He continued to say that this trend is predicted to accelerate in the coming months and years.
Manufacturer Effects
Established marques in the UK market are, for the first time in decades, facing a raft of new brands making themselves known to consumers. In the 1970s, Japanese brands such as Toyota, Honda and Nissan (then known as Datsun) tempted buyers with value for money and mechanical reliability, things that the average British Leyland driver was not familiar with. This forced the existing manufacturers to work harder to retain their customer base, or face a cease to their lineage. It was mostly due to this that many home-grown manufacturers came to their end, and the ones that survived were mostly bought up by larger corporations (eg. Ford acquiring Jaguar, Land Rover and Aston Martin and then BMW investing heavily in MG Rover and taking Rolls Royce under its wing).
Today we are seeing similar pressure being applied on these established brands, this time from Chinese manufacturers (such as BYD) offering BEVs at an attractive price point, while still offering all the technology that buyers demand these days.
Our Experience
As a marketing agency with years of experience in the automotive industry, we are hugely excited to see how the market evolves at this pivotal point in the history of the car. We also look forward to seeing the new entries into the marketplace and how both buyers and manufacturers react to the influx of new models becoming available.
If you are looking to boost your dealership’s visibility to buyers, please get in contact with us today and see how we can help. Whether it’s Radio, TV, Billboards, Social Media or anything else, we are the experts!
