9:16 am, June 4, 2021
New car registrations last month were down nearly 15 per cent on May 2019, latest official figures reveal.
Data published today (Jun 4) by the Society of Motor Manufacturers and Traders (SMMT) shows 156,737 cars were registered, a near eight-fold increase rise on the same month last year.
However, as car showrooms were shut in May 2020, a more representative comparison is with May 2019. When compared to the same month two years ago, May 2021’s figures were down by 14.7 per cent and 13.2 per cent on a 10-year May average.
A total of 1.86m cars are predicted to be registered by the end of the year, and with May adding to the 723,845 already achieved so far this year, the SMMT said the industry is ‘in line’ to meet the prediction.
Fleet registrations grew more than twice as fast as private purchases in May. Large fleets accounted for 50.7 per cent of all new vehicles hitting the road, which demonstrated improving business confidence compared to the same month last year, said the SMMT.
In terms of segments, dual purpose vehicles saw a small decline in market share in the month, down to 26.7 per cent, leapfrogged by lower medium cars which rose to 27.8 per cent. Superminis remained Britain’s most popular car choice, with a 31.1 per cent share.
Battery electric vehicle (BEV) market share declined from 12 per cent a year ago to 8.4 per cent in the past month, although the May 2020 performance was distorted by lockdowns.
Looking more broadly across 2021, plug-in vehicles now comprise 13.8 per cent of new car registrations, up from 7.2 per cent a year earlier, with the most rapid growth seen in plug-in hybrids.
Pure petrol and mild hybrid petrol cars so far account for 60.4 per cent of registrations, while pure diesel and mild-hybrid diesels took a 18 per cent share year to date, compared to 64.6 per cent and 22.4 per cent last year.
Meanwhile, total registrations for 2021 sit at 296,448 fewer units, or 29.1 per cent less, than the average recorded across January to May during the last decade.
Mike Hawes, SMMT chief executive, said: ‘With dealerships back open and a brighter, sunnier, economic outlook, May’s registrations are as good as could reasonably be expected.
‘Increased business confidence is driving the recovery, something that needs to be maintained and translated in private consumer demand as the economy emerges from pandemic support measures.
‘Demand for electrified vehicles is helping encourage people into showrooms, but for these technologies to surpass their fossil-fuelled equivalents, a long term strategy for market transition and infrastructure investment is required.’
The Volkswagen Golf was the surprise of the month as it came out on top of May’s sales charts. The Ford Fiesta, meanwhile, slumped to seventh place in the table, while the Vauxhall Corsa remains on top of the year-to-date chart.
What the industry says
On the road to recovery
The latest May new car registration figures are another sign the industry is on the road to recovery from the Covid-19 pandemic.
What Car?’s research of 1,920 in-market buyers found 31 per cent of buyers are looking to buy between now and September, resulting in a steady stream of traffic to dealerships. With talk of potentially delaying further easing of restrictions, it remains crucial the industry can remain open to buyers.
The current microchip shortage remains a serious cause of concern for the sector, with many manufacturers having to cut down on vehicle production or lower vehicle specification levels to make up for the lack of microchips.
This will add further pressure to an already inflated used car market, pushing up prices of nearly new vehicles even further.
Jim Holder, editorial director, What Car?
Pent-up demand is great news
New car sales have soared as the UK emerges out of lockdown, with registrations in May 2021 increasing significantly versus the previous year.
Pent-up demand for motors is great news for dealers across the country, however there are questions around the ability of manufacturers to meet this huge appetite. Used cars are continuing to hold value as people ordering new vehicles have to deal with extended wait times, and the prospect of bouncing back to 2019 registration levels still seems a little way off.
Karen Johnson, head of retail & wholesale, Barclays Corporate Banking
Signs that sales are ripe for recovery
As the economy begins to gradually move towards normality, motorists are taking their time to re-evaluate what vehicle they require to meet their changing commuting habits.
Despite some caution, there are signs that sales are ripe for recovery in the longer term. The average age of vehicles on our roads is at a record high, suggesting many drivers will be looking to switch soon, and inventory shortages in the used-vehicle market should push motorists towards new models.
The picture is particularly encouraging for future plug-in sales, with an increasing supply of attractive electric and hybrid options for consumers to choose from. And we’re likely to see a further boost to the strong momentum behind electric and hybrid vehicle sales in comparison to diesel, a trend that the SMMT data continues to track.
While continuing supply chain challenges squeeze carmakers’ earnings, dealers will benefit as low stock creates an opportunity for them to build more margin.
Richard Peberdy, automotive lead, KPMG UK
Figures are not surprising
The new car registration statistics are not surprising given the demand and supply dynamics we are seeing in the market at the moment. It’s encouraging to see the new car market beginning to return to strength after the challenges for the automotive industry during the various lockdowns. An increase in demand for new cars gives us an important measure of the health of the market overall.
The strong demand we’re seeing for cars is reflective of positive consumer sentiment towards car ownership, with almost a third of consumers continuing to tell us owning a car is more important to them than it was before the pandemic, to avoid public transport or provide flexibility.
In addition, many consumers have more disposable income as a result of saving during the pandemic, making owning a car feel more affordable. It’s also great to see that demand is increasing for electric vehicles, as consumers look to more environmentally friendly driving options.
Catherine Faiers, chief operating officer, Auto Trader
Recovery slower than expected
With showrooms open for the whole month, and with both business and consumer confidence on the rise, it is disappointing to see that sales of new cars failed to return to pre-pandemic levels in May.
Today’s figures suggest that the expected post-lockdown recovery might be slower than first thought.
Jamie Hamilton, automotive director and head of electric vehicles, Deloitte
Now’s a good time to sell
It’s exciting to see the buzz of activity in the industry as we all recover from the pandemic – this is especially true in the used car sector.
If you’re in the market to sell, now is a great time. A shortage of the stock that usually moves around and makes its way to dealerships, such as ex-contract vehicles, fleet cars and ex-rentals, means that used cars are commanding a premium and selling fast.
This has also come at a time when there are clear challenges around the availability of some new vehicles, due to many manufacturers still getting back up to speed following enforced Covid shutdowns. So used cars are not only selling quickly, the low supply means dealers are able to maximise their margins at this time.
Karen Hilton, CEO, heycar
Drivers want environmentally friendly vehicles
The new car market has burst back into life, and sales in May were up substantially on April’s figures as buyers once again flocked to showrooms across the UK.
With lockdown restrictions set to be eased even further in late June, many prospective buyers will be keen to choose a vehicle that will enable them to enjoy a summer staycation in the UK, or just to travel to see family and friends across the country.
But there are other reasons why dealerships are so busy. AA Cars data shows that drivers’ main reason for buying a new car this year is to own a more environmentally friendly vehicle.
James Fairclough, CEO, AA Cars
Encouraging but also disappointing
The new car landscape in May is one we’ve become accustomed to over the past 18 months, with accelerating growth for new electric and hybrid cars dragged down by sluggish new diesel and petrol registration numbers.
Overall, registrations in May were encouraging, although disappointing if you compare to 2019 levels; but at least it’s something to build upon, and it’s clear the baton is very much with greener motoring.
The biggest problem facing the car industry right now though isn’t actually demand due to fragile consumer confidence, although sales figures would suggest otherwise. From what we’re seeing on the ground, the demand is there, with buyers having money saved up during the pandemic ready to spend. The primary issue for the new car market now is the ongoing problem of limited supply.
Alex Buttle, director, Motorway.co.uk
