UK car sales fall to lowest level since 1992
The coronavirus pandemic pushed UK car sales in 2020 down to the lowest level since 1992, the biggest annual slump since the second world war despite surging sales of electric cars, according to industry data.
Sales fell by 29% during the year to about 1.63m, preliminary figures from the Society of Motor Manufacturers and Traders (SMMT) showed.
The main cause of the decline was the first lockdown imposed in March, the crucial month when sales are usually helped by a change in number plates. Car showrooms in England were closed from late March until June, forcing companies to quickly move to online sales and bring in social distancing in factories.
“It was a very, very difficult year,” said Mike Hawes, the SMMT’s chief executive. “These are unprecedented levels [of disruption] and they’ve challenged the industry continuously.”
Sales peaked at 2.7m as recently as 2016, but 2020 represented the first time since 2011 that total sales fell below 2m. Hawes said the English national lockdown announced on Monday would make it difficult for sales to get back above that level again in 2021.
However, while there were steep declines in sales of petrol and diesel cars, sales of battery electric cars nearly trebled during the year to just under 110,000, accounting for about 6.6% of overall sales. Adding plug-in hybrid electric cars – which combine internal combustion engines with externally chargeable batteries – meant the market share of plug-in cars rose above 10% for the first time.
The industry is rushing to accelerate sales of electric cars even more rapidly after the UK government in November said it would ban the sale of traditional internal combustion engine cars by 2030.
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“We’ve got to go from one in 10 [plug-ins] to 10 out of 10 in nine years,” said Hawes. “That’s the challenge we face.”
During 2020, UK factories also faced the threat of fraught trade talks with the EU, with a trade deal reached only on Christmas Eve. The deal means the industry has avoided the imposition of tariffs or quotas on cross-Channel trade for most cars or parts, although carmakers will have to adjust to significant new paperwork on rules of origin, with procuring battery technology from the EU or UK a particular focus.
Hawes said the deal was a big relief for carmakers, despite not matching the benefits of frictionless access to the EU’s single market. However, he added that the industry was watching closely for disruption of parts imports in the coming weeks amid new border checks.
Carmakers have already faced costly disruption related to import troubles, and Japanese carmaker Honda on Tuesday said it was halting output at its Swindon plant for two days due to delays.
Honda, whose factory is due to close permanently in July, blamed “global supply issues”. Honda, Toyota and Jaguar Land Rover were all forced to suspend output before Christmas as global supply chain problems were compounded by Brexit stockpiling.
The latest lockdown in England, by far the largest UK market, has set back automotive hopes for a recovery by a few more months, but Hawes said the experience of 2020 meant the industry was much better prepared for any disruption in 2021, even if it faced a “rocky few months”.
His sentiments were shared by Bentley’s chief executive, Adrian Hallmark, as the luxury carmaker reported its record contribution to UK sales figures. The luxury carmaker, owned by Germany’s Volkswagen, on Tuesday reported annual sales of 11,206, 2% higher than in 2019, boosted by a strong showing in China.
“As we look to the year ahead we remain cautiously optimistic as much remains uncertain,” Hallmark said.
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