Car registrations
Trend towards smaller cars continues despite Discount scheme changes
3 Oct 2023
Our take on the latest Car registrations (Tue 3 Oct 2023)
Total car registrations up 9.3% in September (seasonally adjusted)
Small car registrations up 16% from August (seasonally adjusted)
Registrations of new rental cars fell 45%pa in September
The key numbers...
- There were 17,071 first-time car registrations in September, a 9.3% increase from August after accounting for seasonal effects. Registrations for both new and used cars increased in September, with 8,150 new and 8,921 used cars registered, up by 9.9% and 6.6% respectively from August (on a seasonally adjusted basis).
- Small car registrations were strong in September, with 9,109 small cars registered, a 16% increase from August after accounting for seasonal effects. In fact, small car registrations have been growing over the last 12 months, with over 108,000 small cars registered in the year to September, a 16% increase from the previous year.
- Large car registrations have increased over the last two months, increasing 67% from July, then 3.8% from August (both figures seasonally adjusted). Despite recent increases, large car registrations over the year to September are still down 25% from the previous year.
- There were 859 new rental cars registered in September, a 45% decline compared to September last year. New rental car registrations were growing strongly until the changes to the Clean Car Discount scheme were introduced on 1 July, which has softened registrations, slowing the momentum that had gathered as the tourism sector recovered from the COVID-19 pandemic.
Small car segment strong after Discount scheme changes
Monthly registrations, seasonally adjusted
...and our reaction
- Car registrations increased in September as expected, with both new and used registrations rising from their recent dips in July, which was driven by the introduction of changes to the Clean Car Discount scheme.
- Despite changes to the Discount scheme settings, which reduced the incentives to register smaller cars compared to larger cars, the small car segment of the market continues to comprise a higher proportion of total registrations compared to the historical norm. This trend suggests that more buyers will continue to favour smaller cars, even if the government incentives roll back further.
- Momentum in the small segment of the car market could also reflect the ongoing cost-of-living pressures faced by households. Cars with smaller engines tend to be more fuel efficient, which would limit a household’s fuel expenses, easing the pressure on household budgets constrained by strong inflation and higher housing and mortgage costs. Another factor is the shift towards hybrid and electric cars which, at least for now, tend to be smaller models.
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