Car sales sink 40 per cent as 2021 gets off to worst start since 1970
Just 90,000 new cars were sold in January, the worst start to a year since 1970 for the UK auto industry.
According to new figures from the Society for Motor Manufacturers and Traders (SMMT), registrations dropped 39.5 per cent last month, with 90,249 cars sold in total.
That’s nearly 60,000 fewer registrations than in January 2020.
The SMMT said that the slump was due to continued lockdown restrictions, which mean that car showrooms are currently closed.
With restrictions expected to continue until March – a key month for car sales, comprising nearly a fifth of total yearly volumes – the body warned that it would be challenging year for the industry.
But analysts said that there were some reasons for optimism despite the current gloom.
Michael Woodward, Deloitte’s head of automotive, said that a combination of government support and fewer opportunities to spend was laying the groundwork for a release of pent-up consumer demand when restrictions are lifted.
In addition, electric vehicle sales continued last year’s trajectory, accounting for 14 per cent of all sales in January. That’s higher than diesel’s 12 per cent market share.
SMMT reduces annual sales estimate
The SMMT has already reduced its forecasts for annual sales to 1.9m vehicles, down from prior estimates of 2m cars.
Last year 1.6m cars were sold in the UK, a drop from 2.3m in 2019.
Chief executive Mike Hawes said: “Following a £20.4bn loss of revenue last year, the auto industry faces a difficult start to 2021.
“The necessary lockdown will challenge society, the economy and our industry’s ability to move quickly towards our ambitious environmental goals.
“Lifting the shutters will secure jobs, stimulate the essential demand that supports our manufacturing, and will enable us to forge ahead on the road to zero. Every day that showrooms can safely open will matter, especially with the critical month of March looming.”
Ian Plummer, commercial director at Auto Trader, said that despite the grim start to the year, there were positive signs that the market will pick up.
“Consumer demand for new cars on the Auto Trader marketplace soared last month, we observed a significant uplift in users viewing new cars on our marketplace which in turn drove record levels of new car leads being sent to retailers”, he said.
“There’s also been a very high demand for vans as people expand their business fleets or start new businesses to capitalise on the changing wider societal trends like home delivery.
“The emergence and adoption of buying online options will also only help new car sales over the coming months, as consumers begin to gain more confidence about doing more of the car buying journey online.”