After One Of The Darkest Years, Automotive Industry Rebounds

Automotive Industry Rebounds After One of Darkest Years 

After the government lifted lockdown restrictions, the UK’s automotive industry has started regaining some momentum. However, the sales are still lower than the pre-pandemic average.

We have witnessed better car sales in April 2021 compared to the same month last year. According to data released by the Society of Motor Manufacturers and Traders (SMMT), vehicle sales rose to 141,600 units in April 2021.

The sales figures of April 2021 show a whopping 30 times increase compared to April 2020. In the first lockdown, the automotive sales were declined by 97% - the lowest figure since 1946.

SMMT reports that while comparatively, the April 2021 figures display a massive improvement, they stay 13% lesser than the monthly averages from 2010-19. However, thanks to the fast UK vaccine program, SMMT expects car sales to reach 1.86 million in 2021 - 14% greater than 2020 and better than the earlier prediction.

Retail demand witnessed a promising recovery as car registration numbers increased compared to last year, reaching 567,000 in 2021. In April last year, the car registrations were 871 only. However, for the first four months this year, they’re still one-third down compared with the pre-pandemic average. In April 2021, the vehicle registrations were still short by -14.5% on the 10-year average.

However, there is a strong likelihood that the demand for vehicles will rise, partly due to the savings of stay-at-home workers. The Click and Collect solution helped keep the market running in the latest lockdown until the showrooms finally reopened on April 12. It is in contrast to April 2020, where COVID restrictions put a stop to private purchases. 

SMMT says we are yet to witness the aftermath of showroom reopening. We see a delay between customers hearing the news and visiting the dealers. Moreover, the process of choosing the vehicle and its delivery takes a few weeks.

Mike Hawes, SMMT's Chief Executive said, "After one of the darkest years in automotive history, there is light at the end of the tunnel. A full recovery for the sector is still some way off, but with showrooms open and consumers able to test drive the latest, cleanest models, the industry can begin to rebuild."

COVID-19 pandemic was detrimental for the automotive industry worldwide, but 2020 also remained the year when electric vehicles saw a surge in their sales. Tighter EU Carbon Dioxide regulations paved a path for electric cars to make their mark in the UK’s automotive industry.

That said, the electric car sales dropped in April 2021 compared to the first three months. Plug-in hybrid vehicles (PHEVs) outdid the all-electrics in sales. PHEVs enjoyed a market share of 6.8% compared to 6.5% of all-electric cars. SMMT says the cuts in government grants for EVs are the reason for this transition.

By the end of 2021, all-electric vehicles would enjoy 8.9% registrations, falling from the initial prediction of 9.3% in January, partly due to the recent cut in grants. PHEVs would have a share of 6.3%, totaling a 15.2% contribution of plug-in vehicles by registration numbers.

Breaking down the data from New Automotive, Volkswagen was the top seller of electric vehicles in April. The reason remained its billions of euros investment to develop different electric cars. Second on the list for most EV sales in the UK was Kia. All-electric US carmaker Tesla couldn’t reserve a spot on the top 10 list due to conflicting import schedules.

For sure, the UK automotive market would get more EV options in the future. Head of Policy, Ben Nelmes says, the “race for EV market share” became furious in the recent months, offering more choices to customers persuading them to switch.