David Borland, EY UK & Ireland Automotive Leader, comments on today’s SMMT new car registration figures for September:
“Due to the impact of the pandemic, September was always going to be a critical month with the 70 plate models arriving on forecourts. Just over 328,000 new cars were registered, but this still ended up with a year on year reduction of 4.4%. It was the largest month of the year so far, but was the lowest September volume since 1999.
“The month started strongly, but was impacted in the second half due to new car stock availability and reduced pre-registrations that normally give a lift in the last few days of the month.
“Electrified vehicles continued growth with battery vehicles increasing 184% and plug ins 138%.
“This results in a year to date position of 1.2M cars registered, with a 33% reduction compared to the same period in 2019. Within that battery vehicles tipped over 5% for the first time, which may appear an important milestone, but it still highlights how much the market, products and infrastructure need to grow to support net zero targets.
Mixed performance in Europe
“Whilst several markets on the continent have benefited over the summer months with incentives leading to recovering volumes since lockdown, France fell 3% and Spain was down 13.5% for the month. Italy continued where it left off in August with the strongest year on year performance with an increase of 9.5%. It appears that incentives have been a useful tool in driving post lockdown stimulus, but once pent up demand has been satisfied and the incentives end or tail off, so can consumer demand and the market returns to a state in the new normal.
What lies ahead
“The industry will take a breath and continue into Q4, where over 350 thousand registrations are required to achieve the predicted 1.6M. However, the impact of Brexit will become very real as we approach Dec 31st and the end of transition period. At this point it is not clear what the outcome of the latest negotiations will be, but companies should turn to practical, commercial, no-regret actions that reduce the potential negative impacts of change. Let’s not forget that additional challenges remain on emissions regulations, risks of further redundancies following the end of the furlough scheme and how this impacts product availability into 2021.”