David Borland, EY UK & Ireland Automotive Leader, comments on SMMT new car registration figures for July:
UK passenger car sales fail to make the podium
“Sales of passenger cars in July were just over 123,000, which is a 29.5% decrease on the same month last year. July 2020 was the third highest performing month for car sales last year and only behind the new plate months of March and September. The strong performance was recorded as the country rebounded from lockdown 1.0, so it should come as little surprise that year-on-year results are down. This is a continuing reminder that any comparison to last year should be taken with a pinch of salt as the pandemic created a volatile and uncertain landscape for car sales.
Going for gold?
“As well as being in the middle of a successful summer Olympic campaign for Team GB, many companies have been reporting positive mid-year trading updates, with used car market demand and pricing continuing to be a key part of the positive performance for dealers.
Decarbonisation of transportation
“With the recent announcements of the Green Deal Fit for 55 proposals and the UK Transportation Decarbonisation Plan, the move to zero emission vehicles continues apace. As a result, there will be many considerations for businesses, as revealed in a recent EY article on the EC proposal, here.
“The proposed legislation is a positive sign for the industry given the significant investments that are being committed to around the globe, and importantly in the UK. Gigafactories breaking ground, and battery and electric vehicle plants receiving renewed commitment from investors and government are pointing to a healthier electrified future for UK automotive.
“A sign that this is not only dependent upon zero emission vehicles being made available, some UK politicians are also raising concerns on the balance and cost of public vs private charging.
“The adoption of electric vehicles by UK consumers continues to increase, with July sales of EVs accounting for 17% of the total market, a significant increase from 9% last July.
What lies ahead
“The forecast for the remainder of the year is positive, despite the impact of part shortages and new car stock availability.
“With policy makers recognising that regulation is needed to create charging infrastructure that is aligned to market demand and vehicle availability, opportunities are opening up in new value pools for many companies across the automotive and energy sectors. Whilst managing the day to day operational issues, now is the time for businesses across the sector to ensure they have strategy and plans in place for their role in the emerging energy ecosystem.”