Press releases

Deloitte comments on SMMT new car registration figures

4 September 2020

Michael Woodward, UK automotive lead, Deloitte, said:

“New car sales fell by 6% in August compared to the same period last year, in what is traditionally one of the quietest months in the automotive calendar.

“Monthly new car sales are almost back to pre-pandemic levels and there is hope that September, a key month for new car sales, will be a bumper month for the industry as consumers take advantage of enticing discounts to secure a new 70 plate. However, according to our latest research, nearly half of consumers are planning to keep their current vehicle for longer than planned meaning that once pent up demand is met, sales may subsequently drop off.

“Demand over the course of the year will also likely be affected by consumers’ financial situations. Should unemployment rates continue to rise, new car sales could stall. However, with many consumers looking for a public transport alternative, demand for cheaper models could fuel the used car market.

“The auto industry typically works on a five to six month production planning cycle meaning that if September doesn’t herald an uptick in sales, more challenging decisions may need to be made for Spring 2021. Some manufacturers might predict sales returning to normal over the next six months, but the consensus view is likely to be less optimistic, potentially impacting planned production.

“Should factories continue to operate below capacity, the pandemic financial support from manufacturers that has been offered to dealerships to date will likely be reduced, or in some cases withdrawn. This could lead to further discounting to ensure new car stock is moved quickly from forecourt to consumer.

“Battery electric vehicles (BEVs) and plug-in hybrids (PHEVs) continue to outperform the market, this month growing by 78% and 221% respectively. As a result, they now hold a 10% share of the market compared to just 4% in the same period last year.

“As the UK looks to meet wider net zero emissions by 2050, and a proposed ban on the sale of polluting vehicles brought forward to 2035, the stage is set for further adoption of electric vehicles. On top of their environmental credentials, an abundance of new models entering the market and recent tax changes making EVs financially attractive will likely see EVs continue to outperform the market for some time yet.”

End

Notes to editors

About Deloitte
In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity.

Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NSE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit www.deloitte.co.uk

Member of Deloitte Touche Tohmatsu Limited

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