Despite strong order books throughout 2022, performance continued to be held back by persistent supply chain issues, which have restricted production globally, resulting in limited model availability, it said.
The market was also 22.9% down on pre-pandemic 2019, marking the fewest LCV registrations since 2013.
Despite the significant economic and supply challenges faced by the sector, demand for battery electric vans (BEVs) grew, with deliveries up 31.2% to 16,744 units.
Mike Hawes, SMMT chief executive, said: “While demand for new vans remained robust throughout 2022, replicating last year’s high levels of fleet renewal was always going to be a challenge with relentless supply chain disruptions and wider economic malaise.
“A return to growth is expected in 2023, but if this crucial sector is to deliver for the economy, society and the environment, action is needed from all stakeholders, particularly in the areas of charging infrastructure and fiscal frameworks, enabling more van buyers to make the switch.”
Registrations of the most popular vans weighing from 2.5-3.5 tonnes fell by 14.4% in 2022, while vans weighing from 2-2.5 tonnes fell by 31%.
Meanwhile, deliveries of pickups fell by 30.4% and 4x4s by 13.6%, with these two segments remaining a fraction of the market.
While overall average new van CO2 emissions rose by 3.9% to 195.7g/km, reflecting a market shift to larger vehicles which offer payload efficiencies, many segments of the van market saw their average CO2 emissions fall.
The LCV market is set to deliver an additional £1.6 billion for the British economy this year, and a further £2.4bn in 2024, as the latest market outlook forecasts around 330,000 new van registrations in 2023.
With the second largest van market of all European nations, the UK should be at the forefront of LCV decarbonisation, with BEV van deliveries expected to rise by 60.7% in 2023.
Public charging infrastructure, however, is already insufficient for the number of plug-in vehicles already on the road and is generally geared towards cars rather than vans, says the SMMT.
With the Zero Emission Vehicle Mandate due to come into force in 2024 – which includes cars and vans – and the end of sale of conventional petrol and diesel vans in 2030, a national van infrastructure plan is essential if environmental goals are to be met, it says.
This means delivering the necessary levels of LCV-suitable charging points across every region of the UK.
At the same time, says the SMMT, a fair fiscal plan and the continuation of incentives will be essential if van buyers are to be encouraged to switch to zero emission and the UK’s ambitious targets for zero emission mobility are to be met.