COVID-19: 2020 car sales down by a third – but reliance on vehicles continues to increase

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Busy street during commute shows heavy reliance of cars

It has been revealed that car registrations dropped dramatically in 2020 due to the coronavirus – but studies show that the pandemic is actually increasing our reliance on personal vehicles.

As the UK begins to vaccinate its population against the threat of COVID-19, there’s a strong element of hope in the belief that there is at last, light at the end of the tunnel. We are still in that tunnel however, and it is worth reflecting on how industries have been affected by the virus and what consumer trends can tell us about the months and years ahead.

The automotive industry is not immune from these trends, and much like every other sector, has suffered its share of setbacks. We want to analyse these trends & give you a better idea of where we will be as an industry, as we begin to navigate our exit from this crisis.

Registrations down

Somewhat unsurprisingly, the total number of vehicles registered in 2020 decreased by a staggering 29.4% of 2019’s total, according to recent SMMT Vehicle Data . This meant that registrations fell from 2,311,140 units to a miserable 1,631,064. Not only is this the UK’s lowest total since 1992, it also represents the steepest decline since the early 2000s.

These numbers are unlikely to shock anybody. The abundance of social problems faced in the light of the global pandemic will undoubtedly explain the drop in registrations. A lack of consumer confidence and a significant number of job losses throughout 2020 have indirectly affected the car buying market.

The good news is that we will likely experience an uptick in car registrations over the course of 2021. As the economy begins to get back on its feet, we will hopefully see a reduction in the rate of unemployment, and those that put off buying a car in 2020, will possibly only have delayed that process until this year.

It didn’t take long for manufacturers to restart production and with a host of exciting new models expected in 2021, we’re hopeful that 2020 will prove to be an anomaly in the record books as far as car registrations are concerned.

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More people choosing to go electric

While diesel and petrol powered vehicles fell by 55% and 39% respectively, the same cannot be said for electric alternatives. All five electric categories recorded an increase in registrations throughout 2020. Battery Electric Vehicle’s registered 185.9% more vehicles in 2020 than in 2019, an increase from 37,850 to 108,205. As a result, the average market share of these five categories increased to 5.7% from just 2.14% in 2019.

Registered vehicles by category 2020 courtesy of SMMT
Table courtesy of SMMT (2021)

Delve deeper in to registrations by manufacturers, and only two are believed to have successfully increased their number of registrations, MG and Tesla. It is little surprise that the two manufacturers most committed to providing affordable electric vehicles have managed to buck the trend and record an increase in registrations over 2020.

Whilst we are yet to see an electric vehicle make the top 10 best-selling models list, we expect this to change in the near future as we experience a shift in consumer habits alongside government schemes to grow the electrical market.

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Reduction in vehicle usage

After a series of national lockdowns, we saw a decline in vehicle usage in 2020, and this is backed up by 49% of UK drivers admitting to using their vehicles less during this period. The RAC’s 2020 Report on Motoring revealed that 75% of people cited COVID-19 as the reason behind their personal reduction.

It is easy to pinpoint exactly why this is the case. Restrictions on travel were implemented in line with the governments strategy to overcome the disease, including people working from home where possible. The immediate reduction of commuters, and daily school runs due to the closure of schools, meant that drivers needed to use their vehicles far less than they did prior to the new rules.

Increased importance of personal vehicle

Despite the dramatic reduction of vehicle usage in 2020, never has owning a vehicle become more important.

RAC’s study has uncovered that 57% of drivers believe it is now more important to own a car than it was before the coronavirus outbreak. Even though actual usage of vehicles has reduced, our reliance on them has become as crucial as ever.

The largest factor contributing to those figures is the lack of confidence in the UK’s public transport system. Of the 40 million drivers in the UK, 52% of them indicated that they will use public transport less in the future because of the effects of the pandemic.

Empty train as public transport suffers because of COVID19

Not only that, only 43% of people said they would reduce their vehicle usage if public transport was improved, a stark contrast to the 57% that said the same thing in 2019. The potential that busy trains and buses hold with regards to spreading the virus ultimately proves too much for over half of all road users.

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