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UK car market suffers catastrophic losses in 2020

Image credit: Dreamstime

The market for new cars in the UK fell by almost one-third in 2020, with Brexit and Covid-19 restrictions playing a large part, according to the Society of Motor Manufacturers and Traders (SMMT).

The UK car industry suffered a total turnover loss of £20.4bn with demand falling across all segments, bar specialist sports which grew by 7.0 per cent. 

With a -10.9 per cent decline in December, the body also said that the recently announced ban on new petrol and diesel vehicles from 2030 probably had an impact. The total slump across 2020 amounted to a -29.4 per cent decline in sales.

Britain’s most popular class of car remained the supermini, retaining a 31.2 per cent market share despite its -25.9 per cent year-on-year decline in new registrations.

The figures did indicate one positive trend, however, with battery and plug-in hybrid electric cars enjoying a “bumper” year, accounting for more than one in ten registrations, compared to a mere one in 30 in 2019.

Demand for electric vehicles grew by 185.9 per cent to 108,205 units, while registrations of plug-in hybrids (PHEVs) rose 91.2 per cent to 66,877.

Most of these registrations (68 per cent) were for company cars, indicating that private buyers need stronger incentives to make the switch as well as more investment in charging infrastructure, the SMMT said.

With the UK entering another lockdown this week, a speedy recovery for the car sector is not anticipated, although the vaccine programme does open the possibility of a recovery later in the year “that would also support the UK’s environmental goals”, the SMMT added.

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.”

Charlie Jardine, founder of EO Charging, which develops software for charging points, was pleased with the uptick in electric car sales: “2020 marks the best-ever year for sales of new electric vehicles in the UK: a 186 per cent year-on-year increase. EVs now account for 6.6 per cent of all new car sales: that’s a huge increase from 1.6 per cent in 2019.

“There is still a long way to go. Just yesterday it was revealed that sales of electric cars in Norway have overtaken those powered by petrol, diesel and hybrids for the first time - over half of new cars sold [there] in 2020 were EV. We’re still a long way behind Norway, but this shows what can be achieved in a short space of time.”

Yesterday, Honda was forced to pause some production at its Swindon plant due to “global supply issues delays”. It plans to restart production on Thursday.

The Swindon site is where the current Civic and Civic Type R models are produced. It currently employs around 3,000 people and creates up to 150,000 new cars per year, but the plant is scheduled to close permanently in July 2021.

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