2020 UK Car Sales: Lowest Demand For 30 Years

January 18, 2021

Sales of new cars in the UK last year dropped to their lowest point since 1992, according to a report from the Society of Motor Manufacturers and Traders (SMMT).

The total sales of 1.63 million cars, with demand suppressed by COVID-19 and uncertainty of our future relationship with the EU, represents a tumble of 29 per cent compared with 2019. That’s the biggest year-on-year fall since the second world war.

During the first lockdown in April, new car sales fell by 97 per cent. “We lost nearly three-quarters of a million units over three or four months,” said Mike Hawes, SMMT chief executive. “Which we never got back.

Overall, the loss in turnover for the automotive sector amounted to £20bn in 2020.

Electric Cars Prop Up The Market

But even while demand for new cars tumbles to historic lows, the picture isn’t a uniform one across all parts of the new car market.

Sales of electric vehicles have soared during 2020. In 2019, electric cars accounted for just 3 per cent of new car sales. In 2020 the represented 10 per cent of the new car market.

…And even that doesn’t reflect just how fast the electric sector is growing: in September 2020 alone there were almost 22,000 electric vehicles sold. In September 2019 that figure was just 7,700.

But the good news for electric cars stands in stark contrast to the sales figures for diesel and petrol cars: demand for petrol models dropped by 37 per cent, while sales of new diesel cars fell by more than half.

Brexit Trade Deal Offers Some Hope

When it comes to recovery, trade with the EU is key for the UK car industry as it represents the UK’s biggest export market.

That’s why the Christmas Eve Brexit trade agreement will have come as a massive relief for British car factories.

But even though the new agreement does avoid major tariffs for the car manufacturing sector, there will be more red tape and extra costs

Mike Hawes struck a cautiously positive note for 2021, however: “With the rollout of vaccines and clarity over our new relationship with the EU, we must make 2021 a year of recovery.”

Source: SMMT