Commercial registrations and activity

Light registrations soften after recovering through 2022

10 Mar 2023

Our take on the latest Commercial registrations and activity (Fri 10 Mar 2023)

New commercial registrations up 1.4% in February (seasonally adjusted)

New light commercial registrations down 0.2% in February (seasonally adjusted)

Road user charge kilometres purchased down 40%pa in February

There were 3,115 new commercial vehicles registered in February, a 1.4% increase from January, after accounting for seasonal effects.
The medium and very heavy segments were strong in February, increasing 1.5% and 11% respectively. But, total registrations were limited by light vehicles where registrations declined 0.2% (all figures seasonally adjusted).
Soft light vehicle registrations have a strong effect on total commercial vehicle sales, as light commercials comprised nearly 44% of all commercial registrations in the year to February 2023.
After record-high purchases in January, road user charge (RUC) purchases declined to the lowest monthly level since February 2003 (excluding lockdown-affected April 2020). This decline confirms the widespread pre-purchasing we anticipated as the RUC discount scheme was unwound – before being reinstated almost immediately.

New light commercial registrations, monthly total (seasonally adjusted)

Light commercial registrations softened in early 2023, with monthly registrations falling to around 87% of the average over the last five years. Registrations of light commercial vehicles spiked just prior to the introduction of the Clean Car Discount, before plummeting in April 2022. New light commercial registrations then steadily recovered over 2022, approaching pre-pandemic registrations of 3,500-4,000 per month (on a seasonally adjusted basis) by November.
Softer light commercials are due in part to higher interest rates. Higher interest rates and lower property values have slowed construction activity, particularly in the residential subindustry, which has contributed to softer demand for light commercial vehicles, such as utility trucks. Additionally, higher interest rates and rising farm costs have squeezed agricultural profits, which has also reduced demand for light commercials.
Registrations at the heavy end of the commercial vehicle market remained elevated in February compared with pre-pandemic levels. The relatively longer time period between ordering and registering heavier vehicles compared with lighter vehicles could mean a softening in heavier registrations is merely delayed. Alternatively, different demand conditions could support ongoing registrations of heavy commercial vehicles, such as a strong pipeline of infrastructure work or elevated demand for road transport services.

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