Press release

8 Jun 2021 London, GB

May UK car sales

David Borland, EY UK & Ireland Automotive Leader, comments on SMMT new car registration figures for May.

Press contact
Adam Holden

Senior Manager, Media Relations, Ernst & Young LLP

Passionate media relations and public relations professional helping to provide insight and clarity to complex business issues. Husband and father to twin boys, and a golden retriever.

Related topics Automotive

David Borland, EY UK & Ireland Automotive Leader, comments on SMMT new car registration figures for May:

May the demand continue

“In the first full month of car showrooms being open since Lockdown 2.0 the sales recovery for passenger cars continues, albeit against the backdrop of a market that was down 89% in May 2020. This May recorded new cars sales of 156,737 which is a 674% rise from last year when only 20,000 cars were sold, as Lockdown 1.0 hit the industry hard. We should of course treat the year-on-year comparisons with caution, particularly given May 2021 was down almost 15% on May 2019, indicating the market is still not back to pre-pandemic performance.

Supply recovering

“Despite the ongoing issues with the supply of certain components, there is some positive news highlighting that manufacturing is starting to recover in line with demand. In the latest Purchasing Manager Index (PMI) figures released this week, it highlighted a resurgence in manufacturing globally and in the UK, with the latest UK index at 65.4, which is the highest since 1994. The challenges with the semi-conductor shortage continues, but some interesting twists are emerging with one manufacturer looking to pay for stock in advance to minimise car production impacts and even vertical integration of the chip manufacturing plants. One of the largest manufacturers also revised full year profit forecasts upwards compared to just a month ago, which indicates the risks are being better managed and balanced to the consumer demand.

Market dynamics

“Markets around the world continue to recover as well, with the US, Italy and France all recording year-on-year growth in the low to mid 40% range, and Spain at almost 180%. The same caution given to the UK recovery should be applied globally as when those markets started and ended lockdowns differs across the board.  

“Changes on powertrain and the movement to electrified vehicles continues in many markets, with Norway, the poster child for EVs, recording over 83% market share for plug-in cars in May. The UK trend continues as it recently passed the milestone of half a million plug-in vehicles now on the road. The market share for the year so far is 13.8%, which is almost double this time in 2020. 

“As we discussed in our recent article, electrification of fleets is a key area to accelerate the transition, why all UK fleets need an electric vehicle transition plan.

The changing road ahead

“With the continued success of the vaccine roll out, and decisions impending on the next stages of lockdown easing that will influence consumer confidence and spending, we expect the market to continue its recovery throughout 2021. But the form and shape of that recovery is still to be determined by many factors outside the direct control of the automotive industry, such as the roll out of charging infrastructure. This was highlighted in the recent study by the Public Accounts Committee, which identified work needed on both the number and spread of charge points – along with education to consumers on EVs and a fall in upfront costs. The industry will need to continue to embrace and manage the uncertainty that it has become accustomed to in the last 18 months.”