Fleet sales mean March new car sales up 11.5 per cent YOY

The car registration data from the Society of Motor Manufacturers and Traders (SMMT) for the month of March shows that the UK new car market recorded its first ‘growth’ since August 2020, with 29,280 more units registered during March compared to the same month last year. However, the month represents the anniversary of the first lockdown in March 2020, when the pandemic brought Britain to a standstill and registrations fell by -44.4 per cent.

Compared with the 2010-2019 March average of 450,189, registrations were down -36.9 per cent, with 283,964 units registered. So far, 2021 has seen 58,032 fewer cars registered compared to January to March last year, equivalent to a loss of £1.8 billion in turnover during the first quarter.

For the sector to return to its pre-pandemic levels, around 8,300 new cars will need to be registered every single trading day for the rest of the year. By comparison, the industry has averaged around 7,400 a day during the past decade and current levels are closer to 5,600 a day.

Click and collect provided a lifeline for the sector – made possible by manufacturers and their networks successfully investing in digital channels. Click and collect does not, however, offer the consumer the same experience and excitement as a showroom environment. With dealerships reopening their doors next week, customers can look forward to choosing and configuring a new car, safely, in person from the wide choice available, as dealers attempt to recover some of the £22.2 billion lost in turnover since March 2020.

While overall registrations were slightly up compared to last year, growth came almost entirely from fleets, which saw a 28.7 per cent increase in registrations. Retail consumer demand remained depressed, falling by -4.1 per cent compared to March 2020 as showrooms remained closed for the duration of the month.

The shift to new technologies is continuing, however, with plug-in vehicle demand reaching its highest ever volume. Battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) took a combined market share of 13.9 per cent, up from 7.3 per cent last year as the number of models available to customers increased from 72 to 116. Registrations of BEVs increased by 88.2 per cent to 22,003 units, while PHEVs rose by 152.2 per cent to 17,330. Hybrid Electric Vehicles (HEVs) also rose 42.0 per cent to reach 21,599 registrations.

Mike Hawes, SMMT chief executive, said: “The past year has been the toughest in modern history and the automotive sector has, like many others, been hit hard. However, with showrooms opening in less than a week, there is optimism that consumer confidence – and hence the market – will return. We know we will see record breaking growth next month given April 2020 was a washout, but a strong, sustainable market is possible if customers respond to the choice and competitive offers the industry provides within the safest of showroom environments.

“New plug-in models are already helping drive a recovery but to convince more retail consumers to make the switch, they must be assured these new technologies will be convenient for their driving needs and that means, above all, that the charging infrastructure is there where they need it, and when they need it.”

Optimism from dealers

Commenting on the SMMT figures, Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), which represents franchised car and commercial vehicle retailers in the UK, described the 11.5 per cent increase as “a notable achievement” for the industry, saying “it reflects the ability of franchised dealers to diversely engage with their customers.” Robinson added: “There is still significant pent-up demand and dealers are ready to deliver when lockdown eases on 12 April.”

She went on: “Today’s figures show that demand for the new ‘21’ plates is high. This demand is expected to further increase as industry data suggests that many car buyers are waiting for dealerships to fully reopen to complete their purchases. As dealers will be able to safely welcome customers back to the showrooms in less than a week, April is expected to be a bumper month.” A recent What Car? survey stated that 59 per cent of car buyers are delaying their purchase until dealerships reopen. Additional data from What Car? suggested that 95 per cent of potential car buyers would be comfortable entering a dealership when the lockdown restrictions are lifted.

“Positively, sales of electrified vehicles have continued to perform this year strongly. While the Government’s recent decision to reduce the plug-in grant has the potential to dampen growth, sales of EVs should continue to increase their market share.”