THE UK new car market recorded its first growth since last August, with 29,280 more units registered during March compared to the same month last year, according to figures from the Society of Motor Manufacturers and Traders (SMMT).
However, the month represents the anniversary of the first lockdown in March 2020, when the pandemic brought Britain to a standstill and registrations fell by 44.4%.
Compared with the 2010-2019 March average of 450,189, registrations were down -36.9%, with 283,964 units registered. So far, 2021 has seen 58,032 fewer cars registered compared to January to March last year, equivalent to a loss of £1.8 billion in turnover during the first quarter.
For the sector to return to its pre-pandemic levels, around 8,300 new cars will need to be registered every single trading day for the rest of the year. By comparison, the industry has averaged around 7,400 a day during the past decade and current levels are closer to 5,600 a day.
Click and collect provided a lifeline for the sector – made possible by manufacturers and their networks successfully investing in digital channels. Click and collect does not, however, offer the consumer the same experience and excitement as a showroom environment. With dealerships reopening their doors next week, customers can look forward to choosing and configuring a new car, safely, in person from the wide choice available, as dealers attempt to recover some of the £22.2 billion lost in turnover since March 2020.
The shift to new technologies is continuing, however, with plug-in vehicle demand reaching its highest ever volume. Battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) took a combined market share of 13.9%, up from 7.3% last year as the number of models available to customers increased from 72 to 116. Registrations of BEVs increased by 88.2% to 22,003 units, while PHEVs rose by 152.2% to 17,330. Hybrid Electric Vehicles (HEVs) also rose 42.0% to reach 21,599 registrations.
SMMT Chief Executive Mike Hawes said: “The past year has been the toughest in modern history and the automotive sector has, like many others, been hit hard. However, with showrooms opening in less than a week, there is optimism that consumer confidence – and hence the market – will return.
“We know we will see record breaking growth next month given April 2020 was a washout, but a strong and sustainable market is possible if customers are attracted to the choice and competitive offer the industry is able to provide within the safest of showroom environments.
“New plug-in models are already helping drive a recovery but to convince more retail consumers to make the switch, they must be assured these new technologies will be convenient for their driving needs and that means, above all, that the charging infrastructure is there where they need it, and when they need it.”
Data from lead-management experts Dealerweb has shown record increases in both enquiries and orders for new and used vehicles in March.
Orders for new vehicles leapt by 44% and used by 45%, against March 2020, as dealers traded strongly through digital channels during lockdown. The average value of a used car order increased from £18,046 to £20,862.
Consumer demand also strengthened with enquiries for new vehicles increasing by 41.8% and 46.9% for used.
James Hill, managing director of Dealerweb, said: “Automotive retail is in a very different position compared to March 2020. The industry has moved quickly to advance the technology used in digital channels, and worked hard to provide a good experience for buyers whatever their method of purchase.
“It’s clear that there is a great deal of pent up demand in the market, which bodes well for a strong performance in April. It is also encouraging to see that dealers have adapted to give the customer more flexibility and choice than ever before.
“It’s clear that there is strong pent-up demand, and we can expect another big spike in orders when dealerships open on 12 April. It will be important to ensure that both warm and aged enquiries are managed proactively over the coming weeks to optimise sales through a key as lockdown ends.”
Michael Woodward, UK automotive lead at Deloitte, said: “The SMMT figures allow us to compare new car sales across two lockdown periods with March’s sales up by 11.5%, year-on-year, fuelled by business and fleet users. This will be encouraging for the sector, albeit reinforcing the importance of physical dealerships as overall sales remain below pre-pandemic figures.
“For individual purchases, click and collect has proven an important lifeline throughout the pandemic, but sales figures suggest it is not a real substitute for the salesroom floor yet.
“With a new ‘21’ plate and pent-up demand, the re-opening of showrooms later this month should see an enthusiastic return of consumers, many of whom have improved disposable incomes as a result of limited spending opportunities during lockdown.
“If the expected uptick in demand happens, the ongoing shortage of semiconductors could have challenging implications for manufacturers that continue to manage the supply of vehicles to dealers and their customers. Consumers may need to wait longer than expected for the cars they want.”
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