Market update April 2024

7 May 2024 | Industry insights

Ross Chambers, our Director of New Business, Marketing and Brand, discusses the automotive market in 2024 so far.

2024 is well underway and the automotive industry faces a mix of challenges and opportunities.

The used market show signs of resilience and positive momentum buoyed by a strong start to the year with AutoTrader reporting strong customer demand and speed of sale to demonstrate strong customer sentiment. Used sales numbers have been strong over a 6-month period as consumers seize the opportunity to take advantage of dropping values. March however did show a year on year drop mostly driven by a drop in diesel car sales. Used car buyers continue to look towards hybrid and electric with competitive pricing stimulating activity.   

In the new market SMMT reported that cars continued to move forward with a 20th consecutive month of year-on-year growth. Fleet continues to be the driving force with private sales showing a downturn. Private consumers are demonstrating a lack of appetite for EVs and clearly strategies must gear up to drive this market and see manufacturers adhere to the ZEV mandate and avoid sanctions. Historic seasonal norms also look to be re-emerging after an anything but normal post pandemic period.

The movement of 2030 to 2035 has added another layer of confusion to the market with consumer appetite misaligned to the ZEV mandate where manufacturers will need to deliver on 80% of new sales as EV by 2030. Manufacturers will have to incentivise mass market to reach these fazed targets and we are already seeing some moves towards this, Honda being a strong example with a large discount on the ENY-1 alongside a £195 monthly price point earlier this year. I believe that you will see more of these strategies focused on upfront discounts and affordable price points to drive adherence to 2024’s 22% ZEV contributions for manufacturers.

Whilst consumer desire remains the economic landscape still challenges many. Affordability of vehicle ownership alongside the cost-of-living crisis clearly gives customers a lot to think about. Fuel prices, insurance rises, ULEZ and more add significant costs to vehicle ownership.

There are reasons to be optimistic with clear indications that consumers are keen to purchase vehicles but also significant challenges with private new purchases and the shift to EV.