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UK car sales plummet 40% in lockdown

The UK’s new car sector has recorded its worst start to a year since 1970; a direct result of the lockdown, despite the advent of click and collect services.

Combined, BEVs and plug-in hybrid vehicles (PHEVs) accounted for 13.7% of registrations in January 2021; compared to 12% for diesel

Just 90,249 new cars were registered in January – down 39.5% or 59,030 registrations on the same month in 2020, and reinforcing that showrooms need to open as soon as it’s safe to do so.

Demand was down for both private buyers (38.5%) and large fleets (39.7%); just 51,002 registrations were recorded for the latter compared to 84,364 in January last year, according to the figures from the Society of Motor Manufacturers and Traders (SMMT).

Registrations to the Business category for sub-25 fleets fell even sharper and were down 56.0%.

With lockdown restrictions in place until March – the most important month of the year for the sector – the SMMT noted that the industry will face a challenging year. It’s already downgraded its 2021 forecast to below 1.9 million new car registrations from its previous prediction of more than two million units. This would be up 15.7% on 2020 but still very subdued in historical terms; in 2019, the 10-year average total stood at 2.3 million.

There were some positive notes though. Uptake of battery electric vehicles (BEV) grew by 54.4% to 6,260 units – equating to 2,206 extra registrations. Plug-in hybrids (PHEVs) were up 28.0% to 6,124 units – almost exactly the same total as BEVs. Combined, BEVs and plug-in hybrid vehicles (PHEVs) accounted for 13.7% of registrations; compared to 12% for diesel.

The rise in BEVs and PHEVs means these powertrain types are now predicted to grow their combined market share to more than one in seven, from just over one in 10 new cars in 2020.

In contrast, petrol and diesel cars registrations both saw huge falls; down by 62.1% and 50.6% respectively. Hybrids also declined; down 23.9% to 6,826 units.

More positive news was in the SMMT’s publication of average new car emissions figures for 2020, with the largest-ever fall in CO2 recorded. Spurred on by increased uptake of BEV, PHEV and hybrid electric vehicles (HEVs), which accounted for almost one in six new car registrations last year, average vehicle CO2 dropped to 112.8g/km – a reduction of 11.8% compared to 2019 and 37.7% compared to 2000.

However, with the industry required to achieve a UK-only CO2 fleet average target of 95g/km this year or face severe penalties, the SMMT said that far greater uptake of low- and zero-emission cars is needed. It also said this underscores the need to get showrooms open as soon as Britain emerges from lockdown, so they can generate the demand required to reach the country’s green goals.

Mike Hawes, SMMT chief executive, commented: “Following a £20.4bn loss of revenue last year, the auto industry faces a difficult start to 2021. The necessary lockdown will challenge society, the economy and our industry’s ability to move quickly towards our ambitious environmental goals. Lifting the shutters will secure jobs, stimulate the essential demand that supports our manufacturing, and will enable us to forge ahead on the Road to Zero. Every day that showrooms can safely open will matter, especially with the critical month of March looming.”

Jon Lawes, managing director of Hitachi Capital Vehicle Solutions, said that despite the industry low in car registrations having continued into the new year, there remains a quiet, cautious optimism from many in the sector for the remainder of 2021, prompted by the vaccination roll-out, as well as new trade agreements in the pipeline for the UK.

“With lockdown restrictions set to ease in the second quarter of 2021, we can expect to see a release of pent-up demand for new vehicles,” he outlined.

“As we start to return to ‘normal’, those consumers, businesses and organisations that delayed buying or leasing vehicles due to the financial uncertainties of the past 12 months, and closed dealerships, may now have the confidence to push ahead.”

For more of the latest industry news, click here.

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.