A dramatic drop-off in demand last month caused slightly artificial growth last month.
New car sales increased by more than 11 percent in March compared with the same month last year, according to new figures. But despite that seemingly positive news, even a leading UK car industry body has admitted the data is not quite as positive as it seems, thanks to the impact of the coronavirus lockdown last year.
Registrations were almost halved in March 2020 after prime minister Boris Johnson announced the country would be plunged into lockdown. With dealers forced to close their doors and customers encouraged to stay at home, the market evaporated.
Although the country remained in lockdown last month, the current restrictions are less stringent, and dealers managed to shift almost 284,000 new cars in March. That’s up from almost 255,000 in March 2020, but it’s still way down when compared with the 2010-2019 March average of 450,189.
Nevertheless, the Society of Motor Manufacturers and Traders (SMMT), which collects these figures, says it’s optimistic that things will improve when dealers are allowed to reopen on April 12. Because demand almost completely disappeared in April 2020, the organisation expects “record-breaking” year-on-year growth next month, and it is also hopeful for the future of electric and plug-in hybrid vehicles.
That might be something to do with the huge growth in the popularity of electric vehicles (EVs) seen over the past year or so. Over the first three months of the year, almost 32,000 new EVs have been sold, up from around 18,000 during the same period last year. So far in 2021, EVs have accounted for around 7.5 percent of all new car sales, while plug-in hybrids make up more than six percent of the market.
But despite this growth, the market is not expected to return to pre-pandemic levels overnight. For the sector to return to its pre-pandemic levels, the SMMT says around 8,300 new cars will need to be registered every single trading day for the rest of the year. Over the past decade, the industry has averaged around 7,400 sales a day, and current levels are closer to 5,600 a day.
“The past year has been the toughest in modern history and the automotive sector has, like many others, been hit hard,” said SMMT chief executive Mike Hawes. “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 and sustainable market is possible if customers are attracted to the choice and competitive offer the industry is able to provide 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.”