Deloitte comments on SMMT new car registration figures has been saved
Deloitte comments on SMMT new car registration figures
04 February 2021
Michael Woodward, UK automotive lead at Deloitte, said:
“New car sales saw their worst January for 50 years, falling year-on-year by 40% as national lockdown restrictions were tightened. With potential buyers unable to visit showrooms, click-and-collect has offered a valuable lifeline to dealers, alongside the more profitable businesses that most operate, such as MOT servicing and repairs.
Recovery in sight?
“Whilst there is considerable uncertainty within the industry, early indications point towards a recovery in the second half of the year once lockdown restrictions have eased.
“The extension of some major government and private sector income-support measures, such as the furlough scheme and payment holidays on loans, mortgages and credit cards, has boosted consumer confidence in personal finances. Increased personal savings, as a result of fewer opportunities to spend, also point to favourable conditions for renewed consumer activity which could unleash pent-up demand.
“Year-on-year sales results are typically a marker of performance but, with sales at record lows throughout 2020, growth is inevitable. Understanding the context of this will be key to gauging the health of the industry in 2021.
No respite for manufacturers
“The path to recovery for manufacturers is less clear. Last year car production in the UK fell by a third, slumping to the lowest level since 1984.
“This output decline has been compounded so far this year by supply chains and a shortage of semi-conductors, forcing some factories to temporarily halt production. With around 3,500 chips in a hybrid EV, compared to about 1,300 in a normal petrol or diesel vehicle, carmakers have been caught out by the growth in demand for EVs alongside electrical items, like tablets. For some manufacturers, this current shortage of chips means production plans may need to pivot.
EVs start the year on a high
“Continuing on from last year’s success, EVs entered 2021 on a high with sales of battery electric vehicles (54%) and plug-in hybrids (28%) achieving a combined market share of 14%, continuing to exceed diesel’s share of the market (12%).
“EVs are becoming an increasingly viable option for consumers, many of whom are influenced by financial incentives as well as climate and emissions concerns. However, for EVs to integrate further into everyday life, greater accessibility to charging points is still required. Ensuring a joined-up approach and continued investment in the infrastructure is key to support growing demand.”
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