More pain lies ahead in short term but there is still lots of hope – experts react to latest new car figures

Experts have been casting their eye over the latest new car figures, after the SMMT revealed that 2020 saw a near-30 per cent drop with December down by almost 11 per cent, as reported by Car Dealer.

Sales should bounce back

Ian Plummer, commercial director, Auto Trader

‘The automotive industry had a lot thrown at it last year, with Covid restrictions closing showrooms, trading tariffs in question as Brexit loomed, and the government changing the goalposts again on the sale of new ICE vehicles, so it’s not surprising that new car sales have taken a hit.

‘There have, however, been some bright spots as we’ve seen a healthy rise in the number of EVs on our roads.

‘As we look ahead to 2021, notwithstanding negative dents to sales from the current and any further national lockdowns, data suggests that sales will bounce back to circa two million levels.’

Significantly better than many feared

Jim Holder, editorial director, What Car?

‘With the latest lockdown announcement, the industry faces more tough months ahead, but the lessons of a tough 2020 ensure it goes into 2021 better prepared for the challenges it now faces. This should prevent sales falling off the cliff edge, as we saw during the first lockdown in March.

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‘From March last year, it was clear 2020 was not going to be a good year for the UK automotive industry. With retailers forced to close their doors for close to three months between March and June, and with varying restrictions imposed throughout the rest of the year, the challenges have been immense.

‘In that context, a 29.4 per cent decline in registrations for the year is actually significantly better than many feared back in May, and underlines how the industry has worked to first make its processes Covid-safe and then to ensure that they can still operate digitally in lockdowns.’

Industry set for more pain

Karen Hilton, chief commercial officer, heycar

‘The disruption and uncertainty brought on by the coronavirus outbreak resulted in a uniquely challenging marketplace in 2020.

‘As forecourts shut once again as the entire UK returns to lockdown, the industry is set for more pain in the early part of the year.

“But if 2020 has proved one thing, it is how resourceful the sector can be. In the grip of its biggest crisis in generations, dealers have responded impressively, finding new and innovative ways to engage with customers by upping their game in the digital arena.’

Trade deal will help

James Fairclough, CEO, AA Cars

‘The run-up to Christmas is traditionally a hard month in which to lure people to the forecourts, and the tough lockdown restrictions imposed across the UK at the end of 2020 ensured this December was no exception.

‘Unfortunately, this week’s announcement of a new national lockdown is likely to hold back sales at the start of this year too.

‘Nevertheless, many dealers will be reassured by the confirmation that car imports from the EU will remain tariff-free under the UK’s post-Brexit trade deal, which will help ensure stable supply and pricing for customers once they return to the forecourts.’

Positive trends will gain momentum

Seán Kemple, managing director, Close Brothers Motor Finance

‘While Christmas Eve gave us a glimmer of hope in the form of a trade deal with the EU, the new year now brings fresh challenges.

‘The national lockdowns will put pressure on showrooms across the country, and we must wait with bated breath to see the finer detail of economic support for consumers and businesses alike.

‘But the sector has proved itself to be resilient, and there are positive trends that will gain momentum in 2021. The surge in demand for electric vehicles is well under way, partially driven by the 2030 ban on new petrol and diesel cars.’

Pent-up demand expected

James Hind, founder and CEO, carwow

‘The majority of new car buyers still want to see and test-drive their new cars before committing to such a substantial financial outlay, and the inability to do that throughout so many months during 2020 has undoubtedly had a huge impact on the industry.

‘Car factories across the world being forced to shut down their manufacturing and production back in spring has also understandably dented the roll-out of new vehicles, with dealers having far fewer new cars in stock to choose from, alongside longer waiting times.

‘Looking ahead, pent-up demand is expected from consumers hungry to reward themselves for a year of frugality and limited options to spend.’

Beacon of hope

Alex Buttle, director, Motorway.co.uk

‘Looking ahead, the car industry really needs a strong start to 2021, but the latest decision to place England into another lockdown will likely expunge any hope of a swift recovery for the new car trade.

‘But it’s not all gloom. Healthy electric car registrations are once again a beacon of hope. And the green car revolution gathered pace in 2020 as electric and hybrid vehicle registrations surpassed diesel sales for the first year ever.

‘The used car market is likely to be the main beneficiary of a slow new car market, as buyers look to find more value with their purchases. A higher percentage than normal of buyers upgrading their car in the new year are likely to look to buy used, even if they haven’t done so before.’

Stage set for further EV growth

Michael Woodward, UK automotive lead, Deloitte

‘Many manufacturers and dealers remain optimistic for the year ahead, in spite of the latest UK lockdown measures.

‘Whilst showrooms will be closed as in previous lockdowns, manufacturing facilities are expected to remain open this time. For dealers, click-and-collect, MOT and repair services also remain permitted, offering a valuable, and profitable, lifeline.

‘2020 was a significant year for electric vehicles and the stage is set for further growth with the government and manufacturers showing significant commitment to EVs.’

Silver lining to clouds ahead

Karen Johnson, head of retail and wholesale, Barclays Corporate Banking

‘A number of manufacturers were reported to have pushed forward the registration of cars in December to get ahead of the Brexit transition deadline.

‘Some consumers may also have decided to make purchases before this key date to guarantee prices had there been a no deal. However, neither of these was enough to prevent a decline in new vehicle registrations versus the same month in 2019.

‘Looking ahead, dealers will be relying on the improvements that they made to their e-commerce offerings during the first lockdown to cope with this latest set of restrictions.

‘Although this won’t be the new year start that many would have hoped for, the experience gained from previous lockdowns may provide at least a thin silver lining to the clouds ahead.’

Breakthrough year for EVs

Poppy Welch, head, Go Ultra Low

‘In the context of the new car market, 2020 will be remembered as the breakthrough year for electric vehicles.

‘After a ninth successive year of growth in EV registrations, we’ve now seen the market share rise to 10.7 per cent.

‘This has been made possible in large part by the government’s ongoing support and long-term vision, combined with the automotive industry’s commitment to developing a wide range of zero-emissions vehicles that are clearly convincing the public with their performance, financial and environmental credentials.

‘While only a handful of EVs were on sale in 2011, there are now more than 100 models available.’

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