For the entire month of April, the showrooms across the United Kingdom remined closed amid the Covid-19 induced lockdown. This month recorded the worst performance in car sales in the recent times. The automotive industry generates a lot of employment in the United Kingdom. The automotive industry has a significant contribution in the health of the nation’s economy. The car retail sector should be in the vanguard as Britain starts to plan for recovery. Manufacturing sector is of immense importance in an economy. To accelerate the UK’s economic regeneration, unlocking manufacturing sector and revitalising subdued demand will play a key role in safely restarting the automotive sector.
The United Kingdom’s economy has faced a lot of uncertainties in the recent past. The economy was tormented by the uncertainties caused by the Brexit, general elections and then the deadly pandemic. The outbreak of the pandemic has left the automotive sector tottering just like other sectors of the economy. The car manufacturers were struggling with the disruptions in the supply chain as most parts are sourced from China, where the pandemic originated. Some of the car manufacturers were also under transitions aiming zero carbon emissions by 2050. The car retailers were already having a rough market as the consumers were shifting to cleaner fuel types vehicles from the conventional cars. The car retailers had to shut down amid the lockdown announced by the government.
In the last four months, the episode of the novel coronavirus has unleashed devastation on the worldwide markets. What is more, this dangerous infection has guaranteed more than 245 thousand lives over the world. The flare-up of this pandemic has prompted negative notions in the global markets. The situation is further worsened by the fall in prices of the oil.
The pandemic has crushed most of the sectors. The aircrafts are grounded. The nations have forced lockdown. The movement has been confined as individuals are approached to remain at home. Nearly, all the economic activities have stopped. Hence, the oil consumption has gone down steeply. On the other side, the world’s significant oil makers have flooded the markets with barrels of oil. In this manner, because of oversupply of oil, the prices have gone significantly down.
As of now the world major stock indices along with the prices of crude seems to slide upwards. Amid the global turmoil caused by the pandemic, the central banks have reduced the interest rates around the world.
Record fall for UK car sales in April
According to figures published by the SMMT (Society of Motor Manufacturers and Traders), the new car registrations in the United Kingdom plunged by 97.3 per cent in April. As the coronavirus pandemic forced the nation into lockdown for the entire month, with showrooms closed and people asked to stay indoors, the UK new car sales recorded a new low. The UK new car sales recorded a previous low of 4,044 units in February 1946, post the end of second world war.
Last month, the new car registrations stood at 4,321, which was less by 156,743 car registrations recorded in April 2019. The new cars registered last month were mostly delivered to front-line public services, companies, and key workers. Similar sales pattern was observed in some parts of Europe with France and Italy recording 88 per cent and 97 percent decline in sales respectively last month. In April, Tesla Model 3, Jaguar I-Pace and Vauxhall Corsa were among the bestsellers with nearly 1,300 units sold together. However, on the Year to date scale, Ford, and Volkswagen rank amongst the top three.
Private buyers decreased by 98.7 per cent year on year to just 871 cars while the Fleet orders of 3,090 units represented 71.5 per cent of the market share. The market share of private cars was reduced to half, just 20.2 per cent in April 2020 from 42.1 per cent in 2019. While the Diesel vehicles maintained their market share in the range of 25 to 28 per cent, the petrol vehicles recorded a significant drop of 35.9 per cent in the market share in April 2020 from 62.8 per cent in April 2019.
Amid the Covid-19 induced lockdown last month, the light commercial vehicle (LCV) registrations recorded a plunge of 86.2 per cent in UK. In addition, 3,387 vans, pickups and 4x4s were registered last month for use in key sectors to support pandemic response.
All the segments and fuel types were impacted by the lockdown induced by the novel coronavirus. The new car registrations in the United Kingdom for petrol and diesel fuel types were down by 98.5 per cent and 97.6 per cent, respectively. Similar trend was observed across cleaner emission vehicles registration as the hybrids (HEVs) were down by 99.3 per cent and the plug-in hybrid vehicles (PHEVs) were down by 95.1 per cent.
However, the BEV (battery electric vehicle), which is a very niche segment witnessed a slight decrease of only 10 per cent in the sales figures. This happened because some pre-ordered deliveries of the latest premium models could not take place amid the prevalent circumstances in the state. The BEV market share in April 2020 rose to 31.8 per cent from 0.9 per cent in April 2019.
The auto retailers managed to support key workers, critical suppliers, and frontline services despite showrooms being closed for the month of April amid the coronavirus crisis. The economy moves on the wheels of the automotive industry. Amid the catastrophe induced by the deadly virus, the industry has played a vital role in keeping the service garages and repair workshops open for vehicle maintenance so that crucial services remain uninterrupted and critical supplies could be transported safely across the nation.
According to the latest new car market forecast for 2020 issued by SMMT, the new car registrations would be around 1.68 million units which are far below from previous expectations. This is likely to be the worst performance recorded by the sector since 1992 (1.59 million units). Despite the prevalent conditions, the BEV market is expected to double to 77,300 units in 2020 due to launch of newer models in this segment. To revive manufacturing and kick-start economic recovery, the automotive sector calls for auto retail to be in first wave of re-openings.