35.5% decline means lowest February car registrations for 62 years

The UK new car market declined by -35.5 per cent in February as 28,282 fewer units were registered during a traditionally weak month for new vehicle uptake, according to figures from the Society of Motor Manufacturers and Traders (SMMT). The industry recorded its lowest February uptake since 1959, with 51,312 new cars registered.

With showrooms closed nationwide since 5 January – and in many parts of the country, since December – both private and fleet sector demand fell, by -37.3 per cent and -33.5 per cent respectively. All vehicle segments saw declines save for luxury saloons, which recorded a 3.8 per cent increase against a statistically very small proportion of the market.

Plug-in vehicles continued to enjoy growth, with BEVs (cattery electric vehicles) and PHEVs (plug-in hybrid electric vehicles) taking a combined 13.0 per cent market share for the month, up from just 5.7 per cent in February 2020. BEV uptake increased by 40.2 per cent to 3,516, and PHEVs by 52.1 per cent to 3,131 as the industry continues to promote a broad range of lower-emission technologies for consumers. However, increasing uptake of these new technologies to the levels required by 2030 remains a mammoth task, with yesterday’s Budget proving a missed opportunity given the lack of measures to support the market overall and notably the transition away from pure petrol and diesel cars and vans.

More positively, the Chancellor answered industry’s call for a furlough extension, vital given the massive fall in vehicle demand. With the country facing ongoing restrictions until at least 12 April, the automotive industry expects a challenging March, traditionally the sector’s most important month which would typically account for one in five annual registrations.

While online orders and click and collect can provide a lifeline, showroom closures mean dealerships will find it significantly more challenging to fill order banks following £23 billion worth of fewer registrations since March 2020. As a result, SMMT has revised its market outlook to 1.83 million new car registrations in 2021, down from the 1.89 million predicted in January. Most of these losses are expected to occur in March.

Mike Hawes, SMMT Chief Executive, said: “February is traditionally a small month for car registrations and with showrooms closed for the duration, the decline is deeply disappointing but expected. More concerning, however, is that these closures have stifled dealers’ preparations for March with the expectation that this will now be a third, successive dismal ‘new plate month’.

“Although we have a pathway out of restrictions with rapid vaccine rollout, and proven experience in operating click and collect, it is essential that showrooms reopen as soon as possible so the industry can start to build back better, and recover the £23 billion loss from the past year.”

NFDA “optimistic”

Speaking for the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers in the UK, Chief Executive Sue Robinson described the February decline as “expected”. However, she added: “Looking ahead, with showrooms due to reopen soon and significant pent-up demand, dealers are optimistic”).

Registrations of petrol and diesel cars were down by -44.5 per cent and -61.0 per cent respectively from February 2020 when the country had not yet experienced the outbreak of the pandemic.

Robinson added: “The plate change month will incentivise consumers and there is significant pent up demand, as evidenced by industry data suggesting that many car buyers are waiting for dealerships to reopen to complete their purchases.

“Positively, sales of Battery and Plug-In Hybrid Electric Vehicles continued to rise, although with showrooms closed, feedback from retailers suggests that it can be more challenging to sell cars that consumers may not be fully familiar with, such as electrified vehicles that have only just entered the market. Customers want to see these cars, try them and ask questions in person, indicating that also our transition to a zero-emission market will benefit from the reopening of dealerships.

Dealers are now looking forward to reopening soon and safely welcoming customers back into showrooms”.