Tuesday 6 April 2021 11:00 am

Car sales pick up in March as market shows signs of life

Car sales rose 11.5 per cent in March as the UK market began to show signs of life after a dire year for the automotive industry.

According to data from the Society from Motor Manufacturers and Traders (SMMT), sales remain around 37 per cent below the monthly average for March between 2010-2019.

The third month of the year is usually one of the top two selling months for the industry, as it is one of the two occasions on which a new license plate series is introduced.

In total, 283,964 cars were registered to new owners last month, up from around 250,000 a year ago.

Since the pandemic struck a year ago, car sales have been massively reduced, with repeated lockdowns pushing down customer demand.

In total, car sales across the full year shrank 30 per cent to 1.6m, down from prior forecasts of 2.3m.

Although many dealerships are currently operating click-and-collect schemes, showrooms are not due to open for another week.

The SMMT said that the enforced closure of such outfits had resulted in a shortfall in sales of 58,032, at a cost of £1.8bn for the industry.

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Mike Hawes, SMMT chief executive, said: “The past year has been the toughest in modern history and the automotive sector has, like many others, been hit hard.

“However, with showrooms opening in less than a week, there is optimism that consumer confidence – and hence the market – will return. We know we will see record breaking growth next month given April 2020 was a washout, but a strong and sustainable market is possible if customers are attracted to the choice and competitive offer the industry is able to provide within the safest of showroom environments.”

Barclays said that today’s figures had beaten their expectations for sales. Head of retail and wholesale Karen Johnson said:

“March brought in a new registration plate for the UK vehicle market, and with it a welcome development for the nation’s car dealers.

“With last year’s March figures encompassing the UK’s last few weeks of pre-Covid spending patterns, we expected to see new car sales down year-on-year across the board.”

EV sales continue charge

The electric vehicle (EV) market continued to grow in March, with sales of plug-in hybrid and battery electric vehicles now making up nearly 14 per cent of market share.

Over the last few months, a number of carmakers have laid out plans to shift away from the internal combustion engine ahead of the UK’s ban on sales of such cars, which comes into effect from 2030.

However, last month’s decision to cut the EV grant from £3,000 to £2,500 could yet arrest the growth of the sector, Deloitte’s head of electric vehicles Jamie Hamilton said.

“Electric vehicles continue to outperform the sector with battery electric (7.7% market share) and plug in hybrid (6.1% market share) both seeing year-on-year growth. As a result, they hold a combined market share of 13.9% in March.

“However, with cuts to EV subsidies on the horizon, sales are likely to be impacted. Where similar incentives have been reduced in other countries, the sale of EVs subsequently fell”, he said.