WITH lockdowns and restrictions in various parts of the country introduced during last month, there were 140,945 new registrations making it the weakest October since 2011 and 10.1% lower than the average recorded over the past decade
However, while the latest SMMT vehicle sales data shows a slight drop in registrations versus the same period last year, Karen Johnson, Head of Retail and Wholesale at Barclays Corporate Banking, said the headline statistic only goes some way to capturing the two faces of the UK’s vehicle market.
She said: “Fleet sales, responding to challenging business conditions, were down by a substantial 3.3% year on year – but private sales, driven by changing patterns of daily life in the current environment, were actually up 0.4%.
“Looking ahead, there’s no great time for a new national lockdown, but UK car dealers will at least be relieved that it isn’t coinciding with one of their busiest trading periods. They’ll now be hoping that consumer appetite for spending on big ticket purchases will have grown by the time the UK comes out of a widespread lockdown, and sales can pick up lost trade as we head into the festive period.”
The arrival of new models and ongoing financial incentives helped initially to sustain UK demand in the month, but the introduction of a ‘firebreak’ lockdown in Wales on 23 October contributed to the nation recording 25.5% fewer registrations by the end of the month, which accounted for more than half of the overall UK decline.
Ashley Barnett, Head of Consultancy at Lex Autolease, said: “With the uncertainty around additional lockdown measures and consumer spending looming large, the short-term future looks challenging.
“Despite this, the continued rise of electric vehicles on the UKs roads is a glimmer of hope. We are seeing an increased interest in EVs among our customers as they begin to realise that alternative-fuelled vehicles can work for them. Barriers to adoption including vehicle choice and range anxiety seem to be disappearing as drivers become more educated on the benefits of making the switch. The figures also suggest that the measures to reduce tax to 0% on zero-emission company cars for 20-21 have worked to incentivise drivers to make the transition now.
“However, it’s important to understand that the total number of EVs on the UK’s roads still only accounts for 5.5% of vehicles. Clearly, we’ve got a lot of ground to make up. The government’s plan to bring forward the ban on the sale of new petrol and diesel vehicles from 2040 to 2030 will no doubt accelerate adoption levels, although additional fiscal support for OEMs and end users is needed to deliver the Road to Zero strategy.”
Subdued activity from businesses drove much of the month’s drop, with around 2,500 fewer vehicles joining larger fleets than in October last year, while private registrations saw a modest increase of 0.4%.
However, this performance was flattered by a weak October 2019, when ongoing supply issues arising from regulatory challenges, as well as political and economic uncertainty ahead of the anticipated Halloween Brexit withdrawal date, saw overall registrations by private buyers recede by -13.1% in the month.
As of mid-October, the industry had been expecting to register about 1.66 million new cars in 2020. However, with the announcement of a second lockdown for England, which will include the closure of vehicle showrooms, the market forecast has been downgraded by a further 100,000 units to 1.56 million.
This equates to a total year-on-year decline of around 750,000 registrations and a £22.5 billion loss in turnover , with 2020 now likely to be the weakest year since 1982.
