New car sales market remains volatile – EY
May’s rise in new car sales bucks a longer downward trend and is unlikely to continue, according to analysis by EY UK & Ireland.
Figures from the Society of Motor Manufacturers and Traders revealed that sales rose 1.6% in the month, but EY believes automotive businesses will need to be resilient and agile going forward.
It says further government support will also be critical to continue the momentum of electric vehicle sales.
Maria Bengtsson, EY UK & Ireland Mobility Leader, said: “An uncertain economic outlook for the UK could prompt consumers to delay major spending decisions according to the EY ITEM Club’s latest economic forecast. Against the ongoing challenging backdrop, the need for automakers and dealers to be both resilient and agile is as important as ever, while the right support from policymakers will be equally crucial.”
“How can automakers compel consumers to make the switch to a BEV? How can businesses and the government educate consumers on the benefits of owning a BEV? How can automakers continue to scale up innovation, variety and quality of new electric vehicles while keeping costs manageable?
“These are all critical questions for the automotive industry going forward, with the answers not yet entirely clear. Seeking out the right advice, prioritising forward planning and lobbying key policymakers will be crucial.”
Fleet sales
Bengtsson continued: “While the fact that fleet sales have begun to decelerate following a strong performance in 2024 is a concern, persistently declining retail sales continue to have a greater impact on profitability.
“Retail sales have shown very little sign of an upward trajectory recently – a trend which continued in May with a slender 2.3% year-on-year decline. This channel should be a critical priority for automakers and dealers alike.
“However, the levers they can pull to entice consumers are finite given the subdued economic outlook, a changing regulatory environment and the sentiment and uncertainty challenges associated with the electric vehicle transition, so collaboration and support from policymakers will inevitably be pivotal.”
