Deloitte comments on SMMT new car registration figures

Michael Woodward, UK automotive lead at Deloitte, said:

“In one of the most important months of the automotive calendar, new sales fell year-on-year by 4% in September. Demand from private buyers was relatively flat (-1%) but a decline in the fleet sector (-6%) had a major impact on overall performance.

“An easing of volume targets has led to dealers pre-registering fewer vehicles than we might see in a normal September. While sales typically attributed to pre-registration activity may filter through to the final quarter, the wider knock-on effect on residuals and the used car market remains to be seen. Dealers see pre-registered cars as a way of bolstering used car stocks, and a lack of activity in this space may drive prices up.

“The reduction in pre-registrations is good for OEMs and leasing companies. It keeps new car prices high and hence the residual price of the used car when it comes back. This anticipated strengthening of residuals could allow leasing companies to reduce monthly lease costs or improve their profitability.

“Dealers have commented about a shortage of ‘the right cars’ being available as OEMs have been conservative in their ramp up of production. Hopefully this will be resolved in following months.

Growth in September does little to mask the challenge facing the industry
“A decline in September sales adds to the growing pressure in the industry. Lost sales during the most restrictive COVID-19 lockdown measures means that year-to-date figures are down by 33% and look unlikely to recover.

“With many UK automotive jobs already affected by the current pandemic, the industry continues to remain live to the economic impact of COVID-19 and ongoing uncertainty around Brexit. The efforts of the SMMT to create a safe-harbour scheme will be seen by many as a lifeline at this time, allowing multiple companies to come together and support critical suppliers without falling foul of anti-competition rules. The UK has a proud automotive manufacturing heritage, and we are pleased to be able to do our bit by acting as a partner on this scheme.

Another bumper month for electric vehicles
"September was another excellent month for electric vehicles, with Battery Electric (BEV) and Plug in Hybrid (PHEV) growing their market share to 11%, compared to just 4% last year. Both BEVs and PHEVs saw growth this month, of 184% and 139% respectively, accelerating an imminent overtake of diesel sales (-38%).

“This is driven not only by environmental credentials of EVs, but also an abundance of new models entering the market alongside financially attractive tax changes.

“With EV sales revving up, the pressure is now on the UK’s charging infrastructure to keep up, with capacity being tested at peak times. Maintaining coordination with charging infrastructure planning is needed for sustained growth. We need to see a joined up approach that considers how many chargers are needed, what kind of chargers are needed and what the underlying power networks look like.”

End

Notes to editors

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