November new car sales ‘blown off course by significant headwinds’
UK new car registrations fell 27.4% in November; a direct result of the second coronavirus lockdown and the resultant shuttering of dealerships.
However, while the closure meant that registrations were down 42,840 units year-on-year to 113,781 new cars – a level last seen during the 2008 recession, according to the figures from the Society of Motor Manufacturers and Traders (SMMT) – the 27.4% decline was vastly better than the 97.3% crash seen in April after the first lockdown came into effect.
The SMMT said that dealers’ newly developed ‘click and collect’ capabilities had helped offset the showroom closures this time round.
This is shown in the figures for the individual market segments; fleet was down 22.1% in November – obviously smaller than the overall 27.4% decline and comparing to a fall of 96.6% in April – and actually boosted its market share from 55.5% in November 2019 to 59.5% last month.
Meanwhile, sub-25 ‘Business’ registrations were down 58.6%, compared to an 88.3% fall in April, while private registrations fell 32.2% in November (98.7% in April).
More positively, demand for battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) continued to grow significantly, up 122.4% and 76.9% respectively, and potentially supported by the PM’s announcement on 17 November of the widely anticipated 2030 ban on new petrol and diesel cars and vans. In fact, BEVs recorded their third highest-ever monthly share of registrations at 9.1%, while the PHEV share increased to 6.8%. In total, more than 18,000 new zero-emission capable cars were registered last month.
In terms of year-to-date figures across all fuel types, the data clearly shows the impact of the pandemic on the car sector, with the market now down 30.7% for the first 11 months of 2020, a drop of some 663,761 units. Fleet is down 32.9% YtD while ‘Business’ registrations have fallen 44.9% and private registrations are down 27.3%.
Mike Hawes, SMMT chief executive, said: “Compared with the spring lockdown, manufacturers, dealers and consumers were all better prepared to adjust to constrained trading conditions. But with £1.3bn worth of new car revenue lost in November alone, the importance of showroom trading to the UK economy is evident and we must ensure they remain open in any future Covid restrictions. More positively, with a vaccine now approved, the business and consumer confidence on which this sector depends can only improve, giving the industry more optimism for the turn of the year.”
EY has said the data shows how a ‘perfect storm’ for the auto sector blew November car sales off course by significant headwinds.
David Borland, EY UK & Ireland automotive leader, said: “The perfect storm of challenges affecting the automotive industry continues unabated, with the pandemic, Brexit and supply issues all impacting consumer confidence and demand for new vehicles.
“Against this backdrop and lockdown 2.0 closing showrooms for the month of November, it comes as no surprise that new registrations suffered significantly.”
He also said that ‘playing the long game’ could be key to the sector’s rejuvenation longer-term.
“With the recent announcements by the Government in its ‘Ten Point Plan for a Green Industrial Revolution’, which included the sales ban of ICE vehicles from 2030; closely followed by the 2020 Spending Review and the planned investment of £1.9bn across charging infrastructure and consumer incentives, it is clear that the longer-term transformation is as important as the challenges the sector faces today.
“The UK can be a long-term competitive player in automotive manufacturing if there is significant investment in battery development, production and the associated supply chain. The investment confirmed in the Spending Review is a welcome first step in the right direction for both the UK automotive sector and consumers.
“The consumer grants will reduce the impact of the higher purchase price of electric vehicles and will be an important factor in the shift to zero-emission vehicles. Investment in the energy sector and charging infrastructure is also a critical step forward, alleviating the concerns of many potential EV buyers around: access to charging at home, duration of charge times, and anxiety over sufficient battery range. But given recent estimates of the number of charging points needed across the UK to support mainstream EV adoption by consumers, further investment may still be needed to support successful roll-out and adoption.”
The National Franchised Dealers Association (NFDA) also said that it was important that businesses and customers continue to be supported during this transition to EVs, while highlighting just how vital a trade deal with the EU is for the overall sector.
However, it had some positive news on the results of the initial days out of lockdown.
Chief executive Sue Robinson commented: “The first few days of the month have been busy with pent-up demand driving sales and franchised dealers are looking forward to a buoyant December as the UK emerges from lockdown.”