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Fleet shores up UK new car market as private demand crumples

Demand for new fleet cars has ensured the UK’s new car market was not completely wiped out in April, with 3,090 fleet cars registered compared to the 871 that went to private buyers.

Fleet orders represented the bulk of the market, taking 71.5% market share; equivalent to 3,090 units

With showrooms shut due to the coronavirus crisis, registrations fell 97.3% overall – in line with similar falls across Europe. France was down 88.8% while the Italian market plummeted 97.5% last month.

Just 4,321 new cars were registered in the month, some 156,743 fewer than in April 2019, with many delivered to key workers and front-line public services and companies. Fleet registrations were down 96.6% but fared better than the 98.7% slump in private registrations. As a result, fleet accounted for 71.5% of the market – compared to 55.9% in April 2019.

All fuel types were hit, with petrol and diesel car registrations down 98.5% and 97.6% respectively, while plug-in hybrid vehicles (PHEVs) declined 95.1% and hybrids fell 99.3%. However, battery electric vehicles sector saw a smaller percentage decrease of 9.7%; the result of pre-orders being able to be fulfilled, with the demand likely due to the new 0% Benefit-in-Kind rating for zero-emission vehicles.

The SMMT has also announced its latest new car market forecast for 2020, indicating the UK is on course for its lowest full-year figure since 1992; the expectation is that just 1.68 million registrations will take place this year, down 27% on the 2.31 million new cars registered in 2019. Figures for the first four months of the year show the sector is already down 43.4%.

Battery electric vehicle registrations are expected to double in 2020 though, reaching 77,300 units; backed by the new BiK ratings as well as an expected increased awareness among drivers of the benefits of reduced air pollution, due to the lockdown.

Announcing the registration figures, the SMMT called for auto showrooms to be included in the first wave of re-openings, to drive manufacturing and kick-start economic recovery; although the Government confirmed two weeks ago that car dealerships can sell and deliver during lockdown, car dealerships and showrooms in England are not allowed to open unless they provide urgent car repairs and other necessary services.

Mike Hawes, SMMT chief executive, said: “A strong new car market supports a healthy economy and as Britain starts to plan for recovery, we need car retail to be in the vanguard. Safely restarting this most critical sector and revitalising what will, inevitably, be subdued demand will be key to unlocking manufacturing and accelerating the UK’s economic regeneration.”

Michael Woodward, UK automotive lead, Deloitte, also commented: “Whilst UK lockdown restrictions are yet to be eased, when they are this could spark a recovery in sales. Early signs from China suggest some consumers have purchased either low-cost second hand vehicles or entry-level new cars to reduce public transport usage.

“The recovery in China was likely helped by the fact that more car purchases are made online. As restrictions in the UK are lifted, some consumers may prefer to purchase online, accelerating the need for dealers and manufacturers to digitise their interactions.”

There have also been calls for a scrappage scheme to be introduced to incentivise sales; the SMMT’s Mike Hawes has already urged the implementation of a package of measures to support the entire industry, including demand-side measure to help encourage customers back into the market.

The European Automobile Manufacturers’ Association (ACEA) has also called for support in Europe; it’s outlined a set of four guidelines to ensure the auto industry can relaunch and help with overall economic recovery, including fleet renewal programmes.

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.