New Car Sales: The Covid-19 effect

When the Government imposed lockdown on the 23rd March, this obviously resulted in the closure of car dealerships and showrooms.

It should therefore come as no surprise that April saw a big drop in new car sales. But how much of a drop?

New registrations for April were down by a massive 97% on the same month last year. To put that in to context, that is just 4,321 new cars and the lowest monthly amount since 1946!

That’s right, April saw new car registrations at the same level they were at just a few months after the 2nd World War ended, when rationing was still very much in place and the country was trying to plan its recovery.

Whilst the likes of Austin, Hillman, Morris, Alvis and Armstrong Siddeley would have been some of the popular choices back in 1946, who’d have imagined that something like the Tesla Model 3 would have been the biggest seller the next time sales were at this level.

For a HNW Insurer like us, with an extremely high proportion of our business made up of new cars, this has been an interesting few months for us.

Of course, those customers that were wanting to take delivery of their new cars in March, April, May and June (and had often been waiting many months for them to be built!) simply couldn’t get them delivered.

This has resulted in a sudden post lockdown influx of new quotes for this backlog of new vehicles and a very hectic motor insurance market for insurers and brokers alike.

Whilst the motor industry is certainly in recovery, it is clear that with the financial uncertainty that this global pandemic has brought, recovery is likely to take many more months (or maybe even years) with June sales figures still almost 35% down on the same month last year at 145,377 newly registered vehicles.

Even though new car sales are drastically down, it’s really interesting to take a look at which cars are selling.

During the low lows of April, the Tesla Model 3 was the number 1 seller closely followed by the Jaguar I-Pace. That’s right, the top 2 sellers were bot fully electric cars.

When we look at the market share by fuel type, SMMT data shows a year on year decrease for diesels (down from 26.7% to just 18.2%) and a decrease in Petrol cars (from 64.8% to 60.01).

Battery Electric Vehicles (BEV) have seen a steady increase from 0.9% last year to 4.7% this year, Plug-in Hybrid Electric Vehicles (PHEV) are up from 1.2% to 3% with other types of hybrids also increasing from 7.6% to 13.9%

Whilst it is clear which way the market is moving, alternative fuel vehicles like those mentioned above are still small in numbers in comparison to traditional petrol and diesel cars but we can definitely anticipate an even steeper climb as we move towards the government’s 2035 ban on the sale of new petrol and diesel cars.

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