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January 6, 2021

UK car market down 29% in 2020

The UK's annual new car market fell by almost a third to 1.63m in 2020, the lowest annual total since 1992.

By Sam Duke

The UK’s annual new car market fell by almost a third to 1.63m in 2020, the lowest annual total since 1992.

The market was hit by COVID-19 enforced showroom closures in the spring (the April market was 97% down at the crisis nadir). The SMMT data showed that the 29.4% annual reduction equates to a 680,076-unit decline, equivalent to GBP20.4bn in lost turnover.

The month of December showed a 10.9% decline versus last year.

It was, however, a bumper year for battery and plug-in hybrid electric cars, which together accounted for more than one in 10 registrations – up from around one in 30 in 2019. Demand for battery electric vehicles (BEVs) grew by 185.9% to 108,205 units, while registrations of plug-in hybrids (PHEVs) rose 91.2% to 66,877.

The SMMT noted that there is room for further growth as most of these registrations (68%) were for company cars, indicating that private buyers need stronger incentives to make the switch, as well as more investment in charging infrastructure, especially public on-street charging.

More than 100 plug-in car models are now available to UK buyers, and manufacturers are scheduled to bring more than 35 to market in 2021 – more than the number of either petrol or diesel new models planned for the year.

Looking ahead, another lockdown across England and ongoing tough restrictions across the rest of the UK will further impact the industry and, while click and collect can continue to provide a lifeline, it cannot offset the impact of showroom closures, the SMMT said.

Additionally, with the UK-EU Trade and Cooperation Agreement now in force, the industry has avoided a catastrophic ‘no deal’ scenario and can plan for a future with more certainty over trading conditions. Given seven out of 10 new cars registered in the UK in 2020 were imported from Europe, the continuation of tariff- and quota-free trade is critical to a strong new car market in the UK.

Mike Hawes, SMMT Chief Executive, said: “2020 will be seen as a ‘lost year’ for Automotive, with the sector under pandemic-enforced shutdown for much of the year and uncertainty over future trading conditions taking their toll. However, with the rollout of vaccines and clarity over our new relationship with the EU, we must make 2021 a year of recovery. With manufacturers bringing record numbers of electrified vehicles to market over the coming months, we will work with government to encourage drivers to make the switch, while promoting investment in our globally-renowned manufacturing base – recharging the market, industry and economy.” 

 BEV – Battery Electric Vehicle; PHEV – Plug-in Hybrid Electric Vehicle; HEV – Hybrid Electric Vehicle; MHEV – Mild Hybrid Electric Vehicle

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