Car Market Insight: March 2026

Insights from F&I Consultant, Natalie Short, and Learning Consultant, Chris Peel, highlight not only headline growth, but also the structural shifts shaping future demand, sales strategies and customer engagement.

March’s session outlines the key trends and what they mean for automotive retailers, fleet operators and commercial leaders.

You can catch up on the webinar here: Automotive Market Insight: March 2026

Strong Growth in New Car Registrations

March recorded 380,627 new car registrations, representing a 6.6% increase year-on-year. This marks the strongest March performance since 2019 and confirms sustained recovery following the disruption of the pandemic.

The growth is supported by both retail and fleet activity, with fleet remaining the dominant channel. Rising private demand indicates improving consumer confidence and a more balanced market expansion.

Record Volumes for Electric Vehicles

Electrification continues to accelerate, with battery electric vehicle (BEV) volumes increasing by 24.2% to exceed 86,000 units for the month. Plug-in hybrid vehicles (PHEV) also saw strong growth, reinforcing their key role in the transition towards full electrification, acting as a ‘bridge’ between old and new powertrain types.

BEVs now account for 22.6% of the market, however, this growth still falls short of Zero Emission Vehicle (ZEV) mandate targets, suggesting ongoing challenges in scaling adoption at the required pace.

Hybrid electric vehicles (HEV) remain stable at 15.8% market share, again, providing a consistent alternative for customers not yet ready to make the full EV transition.

Petrol and Diesel Vehicles Continue to Decline

The shift away from internal combustion engines (ICE) is now firmly structural. Petrol vehicles hold 43.6% of the market, while diesel has fallen to just 4.9%.

This decline reflects both regulatory pressure and changing consumer preferences. Electric powertrains are no longer niche options, and instead, are becoming central to purchasing decisions across both retail and fleet segments.

PHEVs Role in the ICE to EV Transition

PHEVs are emerging as an important bridge for the ICE to EV shift. For customers uncertain about fully electric vehicles, PHEVs provide a practical introduction towards BEV technology while maintaining the familiarity of ICE features.

They allow drivers to gain experience with charging and electric driving while retaining the flexibility and reassurance of ICE vehicles, making them particularly relevant in markets where infrastructure or confidence remains a barrier.

For retailers, this creates an opportunity to guide customers through a phased EV transition rather than forcing an immediate binary choice.

Shifting Sales Channels and Demand Patterns

Sales channel dynamics are evolving:

• Private sales increased by 10.1%
• Fleet sales grew by 3.5%
• Business sales rose by nearly 19%

Fleet continues to dominate overall, but the recovery in retail demand is significant, broadening the base of growth while introducing more diverse customer needs and expectations.

This shift requires more nuanced sales approaches, particularly in understanding individual use cases and financial considerations.

A Different Transition Trajectory for Light Commercial Vehicles (LCV)

The LCV market presents a contrasting picture with electrification progressing more slowly and diesel vehicles remaining dominant.

Several factors influence this:

• Range and payload limitations
• Concerns around reliability and uptime
• Infrastructure constraints
• Higher upfront costs

For commercial operators, decisions are driven by operational continuity and total cost of ownership (TCO) rather than lifestyle or environmental preference.

Economic pressures are also more heightened in the LCV segment as businesses are taking a more cautious approach to vehicle replacement and investment, with a heavy focus on utilisation and cost efficiency.

Changing Customer Behaviour and Expectations

Customer behaviour is becoming more complex and more commercially driven. Key trends include:

• Increased caution in decision-making: customers remain engaged but are more cautious as they explore different powertrain options and take longer to commit.
• TCO focus: there is a growing emphasis on long-term value rather than upfront price. Customers expect clear comparisons across fuel types, running costs and residual values.
• Demand for education-led sales: the increase in product choice has created confusion, with customers requiring guidance alongside information. Sales teams must shift toward consultative conversations that clarify options and authentically build confidence.
• Retention and lifecycle value importance: relationships do not end at the point of sale and ongoing engagement is important in supporting future transitions and maximising customer lifetime value.
• Adapting sales strategies for a changing market: to remain competitive, automotive businesses must adapt their sales approach to reflect this new reality.
• Support the customer journey: sales teams should focus on helping customers navigate change, particularly the transition between powertrains, requiring empathy, clarity and a strong understanding of individual needs.
• Simplify complexity: with more options and conflicting information, simplifying decision-making is essential. Clear, structured guidance can help in preventing customer disengagement and confusion.
• Deliver tailored solutions: there is no longer a one-size-fits-all answer. Matching vehicles to specific usage patterns and financial profiles is now a basic requirement.
• Build commercial partnerships: credibility is key in all markets, but especially true of fleet and LCV markets. Customers expect advisors who understand funding, operations and risk. Strong partnerships will set high-performing teams apart.

External Pressures are Extending Decision Cycles

Wider economic factors continue to influence the market, with cost-of-living pressures, reliance on incentives for EV uptake and broader economic uncertainty all contributing to longer decision cycles.

Customers are doing more independent research, asking more detailed questions and requiring greater reassurance before committing to purchases. This places additional pressure on sales teams to provide clarity and build trust.

What this Means for Automotive Leaders

March’s data highlights a market that is growing but also becoming more complex. The ICE to EV transition is advancing, but not evenly. Customer expectations are rising and decision-making is becoming more commercially driven.

For automotive leaders, success will depend on:

• Strengthening consultative sales capabilities
• Embedding TCO conversations
• Supporting teams to handle complexity with confidence
• Focusing on long-term customer relationships

Final Thoughts

The next Automotive Market Insight webinar is set for Thursday May, 7th. We’ll be in touch soon with registration details and look forward to welcoming you then.

RTS Group works with automotive businesses to improve commercial capability, enhance customer conversations and drive performance in evolving markets.

If you would like support in adapting your sales strategy or developing your teams, please contact RTS Group to continue the conversation.