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New car demand weakens in ‘typically quiet’ August

Significant uptick in electric vehicle registrations not enough to arrest overall 5.8% decline in new car sales… 

Tom Harrison
Content writer
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Posted 8 SEPTEMBER 2020

Demand for new cars fell by a ‘disappointing’ 5.8% in August – despite an encouraging rise in the proportion of electric vehicle registrations. 

A total 87,226 new cars were sold in the UK last month, the Society of Motor Manufacturers and Traders (SMMT) confirmed, compared to 95,573 in the same month in 2019. 
Sales of zero emission-capable vehicles notched a 110% increase – thanks to a flurry of newly released models – and now account for one in 10 of all registrations. 
 
New car sales are now down 39.7% year-on-year, after the industry ground to a halt in the wake of the global coronavirus pandemic.

A typically quiet month

Despite the dreary figures, certain mitigating factors put last month’s 5.8% decline into perspective.  
 
As Dan Hutson, head of motor insurance, comparethemarket.com, explains: “While the number of new car registrations fell compared to last year, August is usually the quietest month for car buying which means that a 5% fall is not too damaging. 
 
“For the motor industry, September will be a key month as people look to take advantage of the new number plates. However, with so many people facing financial difficulty, the rest of the year could well be a big challenge for car producers.” 

The automotive industry has been badly hit by the coronavirus pandemic. Although July saw an 11.3% increase in year-on-year demand for new cars, this figure came off the back of a quarter of huge decline and was largely attributed to pent-up demand and promotional deals.  

Demand dropped by an unprecedented 97.3% in April, then 89.0% in May and 34.9% in June compared to 2019 figures. 
SMMT chief executive Mike Hawes says it’s important “not to draw too many conclusions” from the latest figures, given the typically quiet time of year. 

“With the all-important plate change month just around the corner, September is likely to provide a better barometer,” he added. 

Scale of electric vehicle challenge laid bare

While zero emission-capable cars enjoyed a bumper August with an influx of new releases vying for customers’ attention, the size of the task facing the government is underlined by the latest data. 

Sales of plug-in hybrids increased by 221.1%, while still only accounting for 1 in 30 sales. Registrations of battery electric cars increased by 77.6% in the month, accounting for 6.4%.  
 
In total, electric vehicles make up 4.9% of year-to-date registrations, up from 1.1% in 2019 – as the government works towards its target for electric vehicles to comprise 70% of new car sales by 2030. 
 
Dan Hutson said: “It is encouraging to see a significant jump in demand for electric cars with battery-powered vehicle registrations increasing by 77%.  
 
“While the progress is great to see, the sales still only account for a small proportion of the market and much more needs to be done to increase electric vehicle demand across the UK.” 

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