Deloitte comments on SMMT new car registration figures

Michael Woodward, UK automotive lead at Deloitte, said:

“New car sales fell, year-on-year, by 36% in February as national lockdown restrictions continued to impede sales.

“With showrooms closed, private sales fell by 37% compared to the same period last year. Meanwhile, fleet sales continued to suffer, declining 34% year-on-year. As a result, the industry continues to rely on aftersales and maintenance to get through this challenging time.

Roadmap to April

“Showrooms are scheduled to reopen on April 12, albeit with social distancing measures in place. The combination of pent-up demand and a clearer roadmap out of lockdown has boosted consumer confidence. We expect to see a major uptick in sales once showroom doors reopen, with dealers and manufacturers challenged with managing demand.

“Much of the pent-up demand will stem from the clamour for new plates, usually seen in March. While this will have a positive impact on sales in April, the loss of sales in March could lead to cash flow and planning implications for the industry.

“The recent shortage of semi-conductors has highlighted a problem in the automotive value chain and also needs to be managed accordingly.

Investment on the horizon?

“Despite the squeeze on automotive businesses over the last year, the industry is at an inflection point. Manufacturers need to invest heavily in new technologies to meet consumer demand and face the challenges from new competition. As a result, the Chancellor’s ‘super-deduction’ and other measures announced in the Budget will be welcomed by manufacturers as they continue to invest in battery and other advanced technologies.

EV growth continues

“EVs outperformed the market again this month as battery 40% and plug-in hybrid 52% vehicles saw continued growth. EVs captured 13% of the total market, matching diesel. The trend towards EV is far from a short-term increase, with the UK on a similar trajectory as other North European countries; some of which have seen EVs exceed 50% of new car sales.

“2021 looks set to be a very significant year for the EV sector, and the stage is set for further growth as more prominent manufacturers commit to making their entire model lines electric by 2030.”

End

Notes to Editors

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