Connect with us

Hi, what are you looking for?

Investing

UK new car registrations in 2020 sink to 30-year low

Car sales

New car registrations fell to their lowest level in nearly three decades last year, according to preliminary figures from the industry’s trade body.

It was also the biggest one-year fall since World War Two, when factories were being turned over to military production, the Society for Motor Manufacturers and Traders said.

About 1.63 million new cars were registered in 2020, compared with 2.3 million in 2019 – a decline of 29%.

It was the lowest total since 1992.

The bulk of the lost sales occurred during the first lockdown in the Spring, when showrooms were forced to close, and factories shut down.

“We lost half a million units from March, April, May – and we never recovered them,” said the SMMT’s chief executive, Mike Hawes.

The restrictions introduced later in the year were less damaging, largely because dealers were able to sell cars remotely, using ‘click and collect’ services.

That remains the case during the new lockdown, announced on Monday.

“We can still do click and collect, which is important, because that’s the very minimum we need,” said Mr Hawes. “Not just to keep retail going, but also to keep manufacturing going.”

Overall, the SMMT said the Covid crisis has cost the car industry some £20bn – and cost the exchequer nearly £2bn in lost VAT.

Trade deal worries

There are also serious questions about the extent to which the car market can recover this year. Previous forecasts, which had suggested new registrations could rise to about 2 million in 2021, have been thrown into doubt by the latest restrictions.

But while the market as a whole has suffered over the past year, sales of electric cars have risen dramatically, increasing their share of the market from 1.5% to 6.5%. Sales of plug-in hybrids also rose sharply.

“If we see this continued level of uptake in electric vehicles, then we anticipate that sales of new EVs and plug-in hybrids will overtake diesel cars in 2021,” said Ian Plummer, commercial director of motoring website Auto Trader. “Then, pure EVs will overtake those of their internal combustion engine counterparts in 2026.”

With the pandemic continuing to inflict serious damage on the industry, Mr Hawes says the trade deal between the UK and the EU came as a “massive relief”.

It confirmed that cars and car parts could continue to move between the two regions, without tariffs – or taxes – being imposed, provided certain conditions are met.

The SMMT had previously warned that failing to reach a deal could have cost the industry £55bn over five years – and add £2,000 to the cost of each vehicle

But manufacturers still face potentially significant additional costs due to so-called non-tariff barriers – including border formalities, and the need to obtain extra regulatory approvals for new designs.

“This is not a free deal”, said Mr Hawes.

Electric dreams

Another consequence of the trade deal is that the UK will need to focus on battery production, if it is to maintain its car industry while phasing out petrol and diesel engines.

That’s because in order to qualify for tariff-free access to the European market, the value of car components made outside the UK and the EU will have to be strictly limited.

Specific rules relating to batteries effectively mean that from 2027, they themselves will have to be made in the EU or the UK.

The SMMT believes that, based on current investment plans, UK battery factories will have a capacity of 15 gigawatt-hours (GWh) by 2024.

That is more than seven times the current level, and would be enough to produce 250,000 electric cars per year.

But the SMMT insists much more is needed: 60GWh in order to produce 1 million cars per year by 2030, and 120GWh to produce 2mby 2040.

That, says Mr Hawes, will require “massive investment”.

Read more:
UK new car registrations in 2020 sink to 30-year low

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!

Latest

Economy

Foreign portfolio investments (FPI) yielded a net inflow in May, reflecting renewed optimism in the local economy as restriction measures were gradually lifted during...

Economy

Outsourcing firms in Philippine economic zones will need a long-term remote work considerations to remain competitive against other major outsourcing economies, an official from the industry group said.  ...

Economy

The World Bank approved a fresh $400-million loan for the Philippines which will be used to support financial sector reforms as the country recovers...

Economy

Philippine President Rodrigo R. Duterte on Thursday night urged the Congress to pass his administration’s last two tax reform bills.  In his speech during...

Economy

The prolonged COVID-19 pandemic is clouding economic projections for Southeast Asia, with most countries not expected to return to pre-pandemic growth levels for several...

Economy

US President Joseph R. Biden, Jr. has extended his sympathy over the passing of former Philippine President Benigno S. C. Aquino III, recognizing his efforts in promoting...

You May Also Like

Investing

Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...

Investing

As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Economy

US President Joseph R. Biden, Jr., will rely on ally countries to supply the bulk of the metals needed to build electric vehicles and focus on...

Economy

THE Securities and Exchange Commission (SEC) has warned the public from investing or to stop any investment in a group named Maxxprofit Computer Trading...

Disclaimer: SmartRetirementReport.com, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.



Your information is secure and your privacy is protected. By opting in you agree to receive emails from us and our affiliates. Remember that you can opt-out any time, we hate spam too!