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Fleet demand lags behind private sales as new car market tentatively restarts

Date: 06 July 2020   |   Author: Sean Keywood

UK new car registrations were down by 34.9% year-on-year in June, despite the reopening of dealerships following the coronavirus lockdown.

According to figures from the Society of Motor Manufacturers and Traders (SMMT), demand from fleets was relatively slow to return, as fleet registrations for the month were down by 45.2%, while private registrations were down by only 19.2%.

Business registrations, classed as to fleets with fewer than 25 vehicles, dropped by 52.6%, although these only made up 2.1% of the overall market.

June's overall figures were still a substantial improvement on those for May, when there was an 89% year-on-year drop in registrations.

Although showrooms in England were allowed to reopen in June, the SMMT said that one in five still remained shut throughout the month, while those in Scotland and Wales were unable to open until the end of the month.

The SMMT warned that the hoped-for release of pent-up demand for sales had not yet occurred, with consumers wary of making big-ticket buys, while businesses pause purchasing amid expenditure reviews.

For the year to date, just 653,502 new cars have been registered - the lowest half-year total since 1971.

SMMT chief executive Mike Hawes said: "While it's welcome to see demand rise above the rock-bottom levels we saw during lockdown, this is not a recovery and barely a restart. 

"Many of June's registrations could be attributed to customers finally being able to collect their pre-pandemic orders, and appetite for significant spending remains questionable. 

"The government must boost the economy, help customers feel safer in their jobs and in their spending and give businesses the confidence to invest in their fleets. Otherwise it runs the risk of losing billions more in revenue from this critical sector at a time when the public purse needs it more than ever."   

Amid the gloom, June's figures did show continued growth in the sale of alternatively-fuelled vehicles. Despite the overall market's yearly fall, registrations of pure electric vehicles were up by 261.8% compared with June 2019 to take a 6.1% overall share.

Plug-in hybrid registrations also shot up by 117% to take a 3.4% market share, and there was also 19% growth for conventional hybrids (7% market share), 53.3% growth for mild hybrid diesels (2.7%), and 63.2% growth for mild hybrid petrols (4.5%).

In contrast to the strong performance by electrified cars, registrations of cars with diesel engines were down by 59.8% year-on-year, taking just 15.8% of the overall market, while petrol car sales fell by 39.9%, although that was still enough for a 60.5% market share.

The improved take-up of electrified cars has been welcomed by Ashley Barnett, head of consultancy at Lex Autolease.

He said: "We see emerging from lockdown as a clear opportunity to accelerate the progress that's already been made in terms of cleaning up our roads - especially because a shift towards more flexible working patterns and the need for less business mileage could make EVs practical for more people. 

"Under these circumstances, the often-cited barriers to adoption around range anxiety and access to charging infrastructure will become less of an issue.

"The direction of travel in this country is clear, and with the consultation ongoing about bringing forward the ban on new petrol and diesel vehicles, our advice is to make the move to zero-emission driving now if you can, taking advantage of the incentives available to early adopters."

The individual model sales chart was topped by the Vauxhall Corsa, with 4,528 registrations, ahead of its deadly rival the Ford Fiesta with 4,386.

The Toyota Yaris was a close third with 4,200 registrations, ahead of the Ford Focus (3,551), and the Mini hatch (3,400). 

Completing the top ten were the Volkswagen Golf (3,042), the Mercedes-Benz A-Class (2,889), the Nissan Qashqai (2,821), the Tesla Model 3 (2,517), and the Volkswagen Tiguan (2,494).