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UK’s new car market sees first rise since August 2020

The UK’s market for new cars saw an 11.5 per cent increase in March, the first growth in over six months.

The Society of Motor Manufacturers and Traders (SMMT) said that 29,280 more units were registered during March 2021 compared to the same period last year, which marked the beginning of the UK’s Covid-19 lockdowns.

This time last year, the pandemic brought the British economy to a standstill, leading to a 44.4 per cent drop in registrations.

Despite the rise, the SMMT still painted a dire picture for the UK’s car market, with registrations down 36.9 per cent compared with the 2010-2019 March average of 450,189.

So far, 2021 has seen 58,032 fewer cars registered compared with January to March 2020, equivalent to a loss of £1.8bn in turnover during the first quarter.

In addition to the downturn introduced by the pandemic, automakers were forced to spend more than £735m on preparations for Brexit and its full impact may not be made entirely clear for some time.

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 historically averaged around 7,400 a day over the past decade, with 2021 levels closer to only 5,600 a day.

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.”

With the UK bringing forward its ban on petrol-driven cars to 2030 in November, electric car sales are expected to ramp up considerably in the coming years. There is a considerable amount of activity focused on electric vehicles, ranging from rolling out the necessary infrastructure for EVs to encouraging greater consumer take-up of electric car options.

In 2020, despite the strongly negative trends for car sales through the year, battery and plug-in hybrid electric cars bucked the trend accounting for more than one in ten registrations, compared to just one in 30 in 2019.

Reacting to the SMMT's news, Oliver Shaw, CEO at Kalibrate (an analytics platform for fuel retailers), said: “With people commuting less, an increased awareness of environmental issues and a significant investment in electric cars by the likes of VW, it’s unsurprising to see the UK’s electric and hybrid car sales hit record levels in March. The appetite for electric vehicles (EVs) has been growing, but optimism surrounding EVs becoming mainstream needs to be taken with a measure of caution by manufacturers and consumers alike. The current infrastructure within the UK does not support rapid EV adoption and forecourt retailers are still preparing for a world that is becoming increasingly electric; the end of 2020 saw the beginning of a new era, with the first of 100 planned electric forecourts opening in Essex.

“The reality, however, is that EV cars are going to hit roads quicker than ever before and forecourt retailers need to be ready. To build a robust EV charging network relies on having a data-driven strategy, which can help petrol retailers, as well as traditional retailers, better understand the typical EV driver and how to cater for this growing mode of transport. This 'data-first' approach needs to start now, in order for EV charging networks to be strategically positioned around the UK before petrol and diesel cars leave our roads.”

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