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New car market sees heavy fall amid lockdown showroom closures

Date: 04 February 2021   |   Author: Sean Keywood

UK new car registrations were down by 39.5% year-on-year in January, according to the Society of Motor Manufacturers and Traders (SMMT).

A heavy drop in sales had been expected, since Covid-19 restrictions mean dealerships are currently closed, with the exception of click and collect orders.

A total of 90,249 new cars were registered during January, making it the market's worst start to a year since 1970.

Fleet registrations were down by 39.7%, and business registrations (to fleets with fewer than 25 vehicles) were down by 56%, while private registrations fell by 38.5%.

In terms of fuel mix, the fall in new diesel car sales reached new depths as these dropped by 62.1% year-on-year to take just 12.3% of the market. In contrast, while petrol car sales were also down by 50.6%, these still took a 49.8% market share.

It was also another strong month for pure electric car sales, which were up by 54.4% to take 6.9% of the market, while plug-in hybrids were up by 28% for a 6.8% market share.

Conventional hybrids were down by 23.9%, and took 7.6% of the market.

It was a good month for petrol mild hybrids, up by 40.2% for a 9.8% market share, while diesel mild hybrids were up by 26.5% to take 6.9% of the market.

The continuing lockdown has caused the SMMT to downgrade its new car market forecast for 2021, from more than two million registrations to fewer than 1.9 million. The latter figure would still be an improvement on last year, but well below the ten-year average.

SMMT chief executive Mike Hawes said: "Following a £20.4 billion 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."

Also reacting to the figures, Hitachi Capital Vehicle Solutions managing director Jon Lawes said he saw reasons for optimism.

He said: "Despite the industry low in car registrations continuing into the new year, there remains a quiet, cautious optimism from many in the sector for the remainder of 2021. The UK Government's promising vaccination roll-out, as well as new trade agreements in the pipeline for the UK, could lay the foundations for a strong recovery as the year continues.

"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. 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."