10:33 am, December 31, 2024
It’s at time every year that I find myself saying, ‘what a year that was – it can’t get any busier in the next 12 months’.
This year, however, I really do mean that. It’s why I have written down what I think were some of the biggest talking points of the year.
In no particular order…
ZEV Mandate kicked in
This year marked the first time the government’s ZEV Mandate kicked in. It ruled that every car maker had to ensure that 22% of its sales this year were of EVs, and despite a change of resident at No. 10 Downing Street the Mandate’s importance grew and grew as the year went on.
Initially, many car manufacturers weren’t too concerned, with some hopeful that incentives would hit the market later in the year and therefore drive up consumer interest in EVs. Others, meanwhile, took the option to borrow credits knowing that they’d be introducing more EVs in the next few years. Some even poured over the small print and realised that if they could show that they had reduced CO2 emissions across their fleet to a certain degree, the 22% quota could be cut to a more manageable figure.
Predictably, as the last few of weeks of 2024 hove into view, many manufacturers panicked and slashed prices of brand new EVs leading to some incredible discounts. Leasing customers particularly benefitted with some incredible savings – in the last few weeks of December, many family EV hatchbacks could be had for well under £200 a month, for example.
ICE ban brought forwards
While the Conservative government resorted to moving the ban on the sale of new petrol and diesel cars from 2030 to 2035, Labour, upon entering No. 10 Downing Street, stuck true to its election promise and moved the date back again.
The move was praised by many who believed that decisive action was needed to give clarity to the automotive industry and to consumers, while others felt that the date shouldn’t be moved without giving car buyers a carrot.
During 2024, opinions differed on what incentives should consist of. The plug-in car grant was mooted as an option, while one car manufacturer boss even suggested a tax should be levied on consumers who choose to buy petrol and diesel cars. Probably the most highly fought argument was from the Society of Motor Manufacturers and Traders who called for VAT be halved on new EVs, and public charging costs be brought into line with home-charging tariffs.
Agency sales on hold
Agency sales – or fixed price car sales direct from the manufacturer – has been an industry talking point since 2020 and the Covid pandemic. The idea of the manufacturer taking care of the sale, often through their website, with the car dealer being responsible for handing over the car to the customer, was being hailed as something the industry had to adopt. Several car makers announced they would transition to this form of retailing, with Mercedes-Benz and Volvo all adopting it.
However, 2024 saw a number of the leading players quietly withdraw and shelve plans indefinitely. Stellantis, BMW, Volkswagen Group and JLR paused their intentions to move to the model amid growing concern in the industry that it doesn’t work. Whether Mercedes and Volvo continue to transact in this manner in the long term remains to be seen.
Inflation
A common theme at our Car Dealer Live event in March, our Podcast Live recording in September, and our weekly podcasts this year was the economy – of course it was. Fun fact (if you’re a geek like me): the word inflation was used 18 times in our daily news round-ups during the year – just a small indication of how frequently it was in the headlines nationally.
With an expected change in government, yo-yoing inflation, and sluggish economic growth, the new and used car markets suffered in 2024. As we end 2024, inflation still seems stubbornly high, suggesting this will continue to be contributing factor to the health of the motor trade in the next 12 months.
BYD had a huge stand at the 2024 Goodwood Festival of Speed
Chinese car makers arrived
You can banish the phrase ‘the Chinese are coming’ as in many ways, they came, they saw, and they conquered. That was certainly true if you attended the 2024 Goodwood Festival of Speed, as Chinese brands took over the lawn outside the Duke of Richmond’s country pile; hell, even Chinese-owned MG splashed out and took the event’s headline sponsorship.
The British brand showed it can still sell well despite more opposition from the far east, but it was BYD that really impressed. Between January and October, the firm shifted around 6,000 cars to Brits, beating the likes of Subaru, Smart and DS Automobiles combined.
More Chinese brands are expected to arrive here in 2025 – not all will be successful and others will fall by the wayside, but the industry has to be braced for more competition in the years to come.
Finance, finance, finance
October 25, 2024 will be remembered as a bit of shocking day for everyone in the motor trade. A Court of Appeal ruling against undisclosed commission payments to car dealers found in favour of consumers, leading to significant disruptions in the motor finance sector. Major lenders paused or hastily altered their lending practices.
Along with this, the motor finance sector was already under the spotlight as the regulator, the Financial Conduct Authority, has been carrying out a separate investigation into so-called discretionary commission arrangements.
Could all of this be the next PPI scandal, or will the motor trade just adapt and move on like it usually does? We’ll probably find out in 2025.
Factory closures
As we neared the end of 2024, factory closures across Europe because a common theme in the headlines. Fiat’s plants in Italy slowed down to a trickle at one point, as sales of its electric 500e eased causing the Italian government to ring the alarm bell. Meanwhile, German workers protested against Volkswagen potentially shutting three factories – one of them, amazingly, its core plant of Wolfsburg.
From a UK perspective, it was a year when Stellantis got into its stride in building electric vans at its Ellesmere Port facility, and by the end of the year revealed that it would shut its famous Luton plant that has been building vans for around 120 years.
As I write this, workers at Luton are protesting against the decision, hoping that with boss Carlos Tavares walking away from Stellantis, the decision to close the plant will be reversed. Whatever the outcome, it’s clear that the automotive sector in Europe is facing some considerable headwinds which will likely get stronger and more disruptive in 2025.
