Biggest drop in UK new car sales since World War Two

[January 06, 2021]  By Costas Pitas

LONDON (Reuters) -British new car sales fell nearly 30% last year in their biggest annual drop since 1943 as lockdowns to curb the spread of the coronavirus hit the sector, an industry body said on Wednesday.

Demand stood at 1.63 million cars in 2020, according to data from the Society of Motor Manufacturers and Traders (SMMT). It was particularly hard hit by a 97% fall in April, the first full month of a national lockdown.

Dealerships gradually reopened in June on differing dates across the United Kingdom's four nations.

"We lost nearly three quarters of a million units over three or four months, which we never got back," said SMMT Chief Executive Mike Hawes.

Showrooms in England were closed again during a second lockdown in November but many were better prepared with "click and collect" options, allowing more purchases, but still leading to a 27% year-on-year slump.

The performance leaves new car sales at their lowest level since 1992, and suffering the biggest drop since 1943, when sales fell by more than 90%.

Then, Britain was fighting World War Two and industry was repurposed for the effort.

In 2020, diesel car registrations more than halved, while nearly 30% of sales were electric, hybrid and mild hybrid vehicles as Britain brought forward a ban on the sale of new combustion engine-only cars to 2030.

The sector was also awaiting a trade deal with the European Union. An agreement was reached on Dec. 24, meaning immediate tariffs and disruption were avoided, but the sector has warned of additional costs.

The car sector, like others, now faces the challenge of new lockdowns announced in England and Scotland this week.

The SMMT expects sales to be below 2 million this year, with the sector nervously looking ahead to March, one of the top two selling months of the year due to the change in the licence plate series.

"Where the industry is focussed at the moment, is what do we need to do to try to sustain sales ..., sustain manufacturing over the next two to three months, especially with March being such a critical month for the industry and that will undoubtedly be affected," said Hawes.

(Reporting by Costas Pitas. Editing by Barbara Lewis and Mark Potter)

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