Article Type: Insight

February UK new-car registrations plunge to level of 1959

The ongoing restrictions on dealership activity resulted in a 35.5% year-on-year decline in new-car registrations in the UK in February 2021. Autovista Group senior data journalist Neil King explores the latest figures and the market outlook.

A total of 51,312 new cars were registered in the UK in January, according to data released by the Society of Motor Manufacturers and Traders (SMMT). The association highlighted that ‘the industry recorded its lowest February uptake since 1959.’

The UK emerged from its second lockdown on 2 December, only to see new regional restrictions imposed from 16 December. Subsequently, national lockdowns in England and Scotland were announced on 5 January, with ongoing restrictions in effect across the rest of the UK too.

There was a modest improvement in the market contraction in February, compared to the 39.5% year-on-year downturn in January. However, there were two fewer working days in the month than in January 2020 and, on an adjusted basis, the decline was therefore greater.

The UK registration figures continue to align with the Autovista Group expectation of a return to year-on-year declines of about 30% in countries where dealers are closed for physical car sales. The downturn in the UK during February, however, is larger than the 19% fall in Germany, where car showrooms are also closed. The contraction is also greater than in France and Italy, although dealers were open in these markets.

The only major European market to suffer more than the UK in February was Spain. Although dealers are open, the country is in a perfect storm, enduring a third wave of the pandemic, a weak economy and a fall in consumer confidence, in addition to the end of the RENOVE scrappage scheme and an increase in car-registration taxes.

EVs challenge diesels

UK registrations of petrol and diesel cars fell by 44.5% and 61.0% respectively, but still held a combined 65.3% share of the market. Registrations of standard hybrids (HEVs) also declined, by 22.8%, but the upward trend for plug-in hybrids (PHEVs) continued, with a 52.1% rise. Moreover, demand for battery-electric vehicles (BEVs) grew by 40.2% and electrically-chargeable vehicles (EVs) accounted for 13.0% of registrations, challenging diesel cars, which gained a 13.2% share.

February 2021 new car registrations SMMT

Source: SMMT

‘However, increasing uptake of these new technologies to the levels required by 2030 remains a mammoth task, with yesterday’s budget proving a missed opportunity given the lack of measures to support the market overall and notably the transition away from pure petrol and diesel cars and vans,’ the SMMT emphasised.

Delayed recovery

On 22 February, UK prime minister Boris Johnson outlined the roadmap for easing restrictions in England, with non-essential retail, including car showrooms, able to reopen no earlier than 12 April. In Scotland, this is expected from the last week of April. The next review of restrictions in Wales is on 12 March, with non-essential retail possibly able to reopen as soon as 15 March. A timetable for easing restrictions in Northern Ireland has not been announced, although a review is planned for 16 March.

Accordingly, Autovista Group’s latest base-case forecast has been lowered to 1.86 million units, equating to 14% improvement in new-car registrations in 2021, with further growth of 11% predicted in 2022. This is predicated upon vaccination progress preventing any further lockdowns in 2021 and new-car deliveries being largely unimpaired by semiconductor shortages and/or post-Brexit border delays. Similarly, the SMMT has revised its market outlook to 1.83 million new-car registrations in 2021, down from the 1.89 million units predicted in January.

In a downside scenario, however, greater disruption to new-car registrations (and supply) is assumed for 2021, further reducing the opportunity to recover losses later in the year. The forecast for this worst-case scenario is for UK new-car registrations to recover by only 10% in 2021, to about 1.79 million units, with further growth of only 9% in 2022.

In a more positive upside scenario, the UK automotive sector will emerge more positively, with dealers quickly returning to full operational capacity to meet increased demand. A less-severe impact on the wider economy would also bolster new-car registrations in 2021 and beyond. In this scenario, the UK new-car market is forecast to grow by 18% in 2021, to over 1.9 million units, and expand by 13% in 2022.

Dealers stifled

Mike Hawes, chief executive of the SMMT, commented; ‘these closures have stifled dealers’ preparations for March with the expectation that this will now be a third, successive dismal ‘new plate month’. Although we have a pathway out of restrictions with rapid vaccine rollout, and proven experience in operating click-and-collect, it is essential that showrooms reopen as soon as possible so the industry can start to build back better, and recover the £23 billion (€26.7 billion) loss from the past year.’

With car showrooms closed in most (and likely all) of the UK until at least 12 April, order intake will continue to be suppressed, further delaying the automotive recovery. An improvement in orders is expected in April, especially with the release of pent-up demand, but is unlikely to translate into significantly healthier registration volumes until May. Autovista Group estimates that the extended lockdown in the UK will result in the loss of approximately 200,000 new-car registrations between January and April, most of which will not rematerialise later in the year.

How are new and used-car sales faring in Poland?

Dealers in Poland did not shut down during the pandemic last year. They adapted quite quickly to new forms of sales, such as remote and online selling. However, vehicle registration offices operated erratically and the climate of uncertainty negatively impacted sales. Marcin Kardas, head of editorial at Autovista Polska, considers the impact of the pandemic on the Polish automotive market and how it may fare in 2021.

During the pandemic in 2020, car factories around the world halted production, limiting the choice of vehicles to be stockpiled. The situation slowly began to ease just before the summer holidays. Manufacturing restarted, but demand was at a much lower level than the year before.

In Poland, it was important to keep fleets as the main player in terms of new vehicles. In an uncertain economic climate, various forms of lease contracts were massively extended and planned replacement of cars did not go ahead. This, in turn, resulted in the relatively high availability of stock cars, but interest in them was still below expectations, with the exception of the premium segment. Added to this was the prospect of a change in EU emission standards for new passenger cars from 1 January 2021.

Importers were trying at all costs to get rid of vehicles with the old Euro 6d-TEMP standard but the spectre of fines for failing to meet CO2 emission targets and the change to Euro 6d-engine technology has fuelled  a sharp rise in new-car prices, further reducing the attractiveness of the offer. In this context, the demand for premium cars is very apparent.

The price of new cars has risen sharply, further limiting their attractiveness. In this context demand for premium-brand cars continues. It seems that the difficult market situation may have even fuelled sales for this tier. It should be remembered, however, that for years the heavily-discounted prices of new cars in higher segments came close to the rising prices of those in lower segments. Additionally, the subsidies paid to entrepreneurs could be spent in part on the purchase of new vehicles.

’The automotive sector was not spared the hardships associated with the reality of a pandemic. Restrictions on international transport, factory shutdowns, sanitary regime requirements or even economic problems have had a significant impact on the market situation. Reductions in supply, fluctuations in demand and uncertainty among both sellers and buyers are just some of the phenomena observed, which have not been without effect on the level of vehicle values,’ noted Autovista Polska data analyst Mariusz Smoliński.

‘At the same time, emission restrictions were tightened, which translated into higher prices of new cars as well as an increased presence of hybrids and electric cars in importers’ offers. Forecasting the situation in 2021 is extremely complicated, but undoubtedly the further course of the fight against the pandemic and its consequences will play a key role,’ he added.

In 2021, the situation should stabilise and prices should stop rising, but much will still depend on the pandemic and the effectiveness of vaccines. Sales in Poland should increase due to higher fleet-customer activity, although they will certainly not return to 2019 levels as of yet. It is also important to remember the ongoing shift to remote working. This removes the need for company cars or limits to vehicle mileage and periodic replacement. Manufacturers will face a difficult period of recovery from the crisis, combined with huge expenditure on the introduction of new technologies and electrification.

 Used cars surge as restrictions ease

The used-car market experienced a surge in 2020. The spring pandemic wave in Poland and Europe effectively blocked the sale of used cars, but once the restrictions were lifted, there was an unexpectedly large increase in demand.

Since mid-2020, there has been a real boom in Poland and it was only towards the end of the year that demand significantly calmed down. This was probably related to gradual market saturation, the holiday season and the spectre of further restrictions during the second wave of the pandemic. This was confirmed by a sharp slowdown in sales since November. The reasons for such a high interest in second-hand cars were many:

  • The desire to isolate and avoid public transport;
  • The lower financial risk in uncertain times;
  • The closure of factories, which created a problem with the availability of new vehicles; and
  • Very favourable fuel prices, which fell during the pandemic.

However, this does not fully explain the huge demand for the youngest used cars, namely cars that are one to three years old. These vehicles have not been particularly popular for several years, losing out to rental offers for new vehicles.

One explanation may be the increase in list prices, which has caused the gap between the value of second-hand vehicles and new vehicles on the domestic market. In Europe, demand for used cars has also risen sharply and Polish dealers have taken advantage of lower prices at home and started to export them in large numbers.

It should also be remembered that during the lockdowns in Europe, interstate borders were temporarily closed and quarantines imposed, which appear to have resulted in a reduced supply of second-hand cars – affecting mainly older vehicles and those of American origin. Either way, demand was so strong that by the end of 2020, the youngest cars were becoming scarce and their market values exceeded prices from early 2020.

Based on the Autovista Group COVID-19 tracker, the statistical increase in Poland amounted to 2.7%. The fastest effect was felt by the youngest cars, but at the moment the largest increases can be seen in vehicles five years old and older.

Poland price index by vehicle age for 12 months from 1 February 2020

Poland price index February 2020

Source: Residual Value Intelligence, Autovista Group

Confirmation of the good situation in the secondary market is also supported by the average time to sell used cars, which for the popular segments, has returned to the levels seen at the end of 2019. For premium cars it is even lower.

The continuation of the good run for used cars in 2021 will depend on the economic situation, the extent of unemployment and progress with pandemic mitigation. The return to work or the possibility of free movement, including in Europe, will determine purchasing behaviour. In Poland, we can expect to see an increase in the supply of used cars due to the postponed replacement of fleets in 2020 and the gradual removal of import barriers caused by lockdown.

Monthly Market Dashboard: Lockdowns impact RVs and stock days in February

Autovista Group’s interactive monthly market dashboard (MMD) reveals that residual-value and stock-day developments are being adversely affected by the ongoing lockdown restrictions in Germany and the UK in February. Senior data journalist Neil King explores the analytics.

This month’s MMD reveals that the average residual values (RV) of cars aged 36 months and with 60,000km were higher in all the Big 5 European markets in February than a year earlier. However, values were lower than reported for Italy and the UK in January.

RV retention, represented as a percentage, declined month on month in Italy and the UK too, along with Germany. The largest decline in RV-percentage (RV%) terms was in the UK, where the average was 46%, equating to a 3.8% change compared to January. The country remains in lockdown, with restrictions on dealer activity in England extended to 12 April.

Similarly, German dealerships remain closed until 7 March. The month-on-month downturn in RV retention in February was only minimal, but Germany is the only major European market where the RV% was lower in February 2021 than in February 2020, albeit by only 0.4%.

Monthly Market Dashboard February 2021

Rising stock days in Germany and UK

In addition to the pressure on RVs, three-year-old cars are selling more slowly than a month ago in Germany and the UK as the closure of dealerships (except for online ‘click-and-collect’ sales and servicing/repairs) hinder transactions. The average number of stock days rose by 9%, to 55 days, in Germany and by 14%, also to 55 days, in the UK over the last month.

Compared to February 2020, three-year-old cars are moving on more slowly in France, Spain and the UK. The latter is suffering the greatest slowdown in the average number of days for 36-month-old cars to sell, up 35%. In contrast, cars are still selling quicker than a year ago in Germany as stock days dramatically reduced from July 2020 until the end of the year, before rising since.

The fastest-selling cars in the major European markets in February 2021 are in Italy. The Volvo XC60, BMW X1 and Kia Sportage are all taking fewer than 30days to find a new home.

RV-outlook adjustments

The new MMD also features the latest Autovista Group RV outlook. A downward trend is forecast in 2021, with prices of used cars in the 36 months/60,000km scenario declining in all the Big 5 European markets. In the February update, the RV outlook was improved slightly for Italy, but values are still forecast to decline by 3.1% in 2021. Used-car prices are forecast to decline by 0.4% in France, 0.7% in Germany, 1.1% in Spain and 1.4% in the UK in 2021.

In Germany, the outlook has improved slightly for 2022, with the RV decline limited to 0.2%, but Spain’s growth outlook has been downgraded from stability to a contraction of 0.5%. For 2023, the RV outlook has been revised subtly downwards in both Germany and Spain. RVs are still forecast to rise in all markets except Germany however, albeit only minimally.

Click here or on the screenshot above to view the monthly market dashboard for February 2021.

The remarketing risk of EVs

The remarketing of electrically-chargeable vehicles (EVs) is examined by Autovista Group experts in our latest webinar. The mixed approach across Europe to provide stimuli for EV sales is paying off, with forecasters predicting a 40% market share for the technology by 2030. Does the increase in registrations trigger new remarketing risks? The panel considers whether the increasing sales of EVs will impact RV performance over the next three years. It also looks at potential differences in risk between BEV and plug-in hybrids (PHEVs).

You can view the entire webinar below, or download the slide deck here.

Autovista Group will be running a number of webinars looking at automotive trends this year. To be notified of upcoming events, subscribe to the Autovista Group Daily Brief.

Podcast: How does electric impact residual values and used-car strategies?

The Autovista Group Daily Brief team takes a look at some of the biggest automotive trends of the past fortnight. Phil Curry, Neil King and Tom Geggus discuss electrically-chargeable vehicle residual values, electromobility strategies and modular electric platforms.

https://soundcloud.com/autovistagroup/electrified-rvs-strategies-and-platforms

Show notes

Surging demand for new BEVs mounts pressure on residual values

France invests €100 million in EV-charging infrastructure

Call for one million public EV chargers in the EU by 2024

Ford to be zero-emission capable in Europe by 2026

Jaguar makes BEV and hydrogen changes on path to net zero

REE maps out UK engineering centre

Shell to transform into net-zero energy provider by 2050

Video: How can carmakers attract investment?

Autovista Group chief economist Dr Christof Engelskirchen and director of automotive agency Car Design Research, Sam Livingstone, discuss how investors value car-producing technology companies above traditional OEMs. As more new entrants come into the automotive industry, what options do traditional players have to engage and attract investment?

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Video: Do January’s European car registrations point to a recovery?

Autovista Group Daily Brief editor Phil Curry discusses the latest registration figures in Europe’s biggest automotive markets. Are there indications of improvement on last year’s performance?

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Show notes

Deceptively shaky start to 2021 new-car registrations across Europe

Germany: new-car registrations down 31% in January 

UK new-car market suffers ‘worst start to the year since 1970’

EU new-car registrations suffer biggest fall since May 2020

Autovista Group senior data journalist Neil King explores the January 2021 new-car registration figures released by the European Automobile Manufacturers’ Association (ACEA). Two fewer working days, compounded by lockdowns and taxation changes in some markets, depressed the regional result. However, the mitigating circumstances and positive results in other countries give reason for cautious optimism.

New-car registrations in the EU declined 24% year-on-year in January. Volumes fell below 730,000 units, down from over 950,000 registrations in January 2020. This was the severest monthly decline in the market since May 2020, when the market contracted by more than a half as the first wave of COVID-19 lockdown measures were only starting to ease across Europe.

EU new-car registrations, year-on-year % change, January 2020 to January 2021

Jan 2021 EU registrations from Jan 2020 onward

Source: ACEA

The severe EU-wide downturn in January was expected given the double-digit year-on-year declines in Italy and Spain, as well as in Germany.

With just 41,966 new cars registered during the month, Spain endured a dramatic market contraction of 51.5% compared to January 2020. However, adjusted for the two fewer working days, the year-on-year decline was about 43%. Storm Filomena also affected registrations activity. Furthermore, the December figures were buoyed by consumers taking advantage of the RENOVE scrappage scheme before it ended on 31 December. Similarly, the increase in vehicle registration taxes from 1 January brought demand forward into the tail end of 2020. Autovista Group estimates that about 10,000 registrations were lost last month as a result.

New-car registrations fell by 31.1% in Germany during January compared with the same month in 2020. This aligns with the Autovista Group expectation of a return to year-on-year declines of about 30% in countries where dealers were closed for physical sales. Restrictions were originally in place until 14 February, but were subsequently extended to 7 March.

The German market was also hampered by the return to a 19% VAT rate since 1 January 2021, which had been reduced to 16% from 1 July to 31 December 2020. Autovista Group estimates that this change advanced about 40,000 new-car registrations into December 2020, when the market rose 9.9% compared to the previous reporting period. Furthermore, the shortage of semiconductors will have invariably disrupted some new-car deliveries in the country.

Lockdown measures also adversely affected dealer activity in other European markets last month. Consequently, new-car registrations declined by more than 20% year on year in Austria, the Netherlands and Portugal.

Cautious optimism

In Italy, the year-on-year downturn in January was 14%. This was the fourth consecutive monthly decline in the country following growth in September due to the government scrappage incentives that came into effect at the beginning of August as part of the Decreto Rilancio (Relaunch Decree). These have been exhausted, but the negative effects are being counterbalanced by new purchase incentives to renew the Italian vehicle fleet with less polluting and safer cars, introduced on 1 January. Adjusted for working days, the market only declined by about 6% in the month.

New-car registrations were 5.8% lower in France in January 2021 than in the same month of 2020, according to the latest data released by the CCFA, the French automotive industry association. This is a significant improvement on the 27% contraction in November, when dealers were closed for most of the month, and the 11.8% year-on-year downturn in December. Moreover, there were two fewer working days in January 2021 than in January last year and, adjusted for working days, the CCFA calculates that registrations actually rose by 3.6% in the month.

All EU new-car markets contracted last month, with the exception of Sweden, which posted year-on-year growth of 22.5%. When adjusted for working days, however, Autovista Group estimates that the EU-wide downturn in January was 16%. The adjusted modest decline in Italy and growth in France especially give grounds for cautious optimism in 2021.

The fallout from COVID-19 is expected to continue to affect vehicle markets across the continent during the first quarter of 2021. However, as vaccination programmes progress and restrictions gradually ease as a result – hopefully never to return – registrations should pick up in the second half of the year.

The European Union’s new-vehicle registration recovery will begin this year with an increase of 10% compared to 2020, according to a forecast from ACEA. A 10% increase equates to 10.9 million new cars on EU roads this year, higher than the 9.9 million registered in 2020. Nevertheless, that is still 16% down on 2019, the last full year of non-COVID-19 impacted sales.

Manufacturer performance

All the leading European carmakers registered fewer new cars in the EU in January 2021 than in January 2020, except for Volvo. The Swedish manufacturer registered 9.4% more new cars than a year earlier, buoyed by the growth at home.

Mitsubishi and Honda suffered the greatest losses in the month, with registrations down by 63% and 50% respectively year on year. The BMW and Daimler groups both suffered modest declines of 14% in the month, ahead of Toyota, which was the strongest performer in 2020.

Across Europe, Autovista Group expects manufacturers with a strong electrified portfolio will perform comparatively well in 2021 as consumers are less likely to be tempted by used examples. This is because they tend to be less price-sensitive buyers, but there is also limited availability of the latest hybrid and electric models on the used-car market.

Autovista Group has outlined its key predictions for the year ahead, focusing on new-car registrations, used-car demand and residual values, and tech advances.

Used Car Market Update January 2021

Used Car Auction Wholesale Market

Whilst online shopping has become increasingly popular in the UK over the last few years, 2020 substantially accelerated this to the point that some households have been making most, or even all of their purchases via the internet. This has extended to the buying of cars, both new and used, with several companies launching operations offering this service. Because the sale of used cars has changed from being a largely “physical” process to a “virtual” one, the used car market has not suffered as drastically as may have been feared when lockdown was first introduced in March 2020.

As a result of this, the used car auction market had a relatively positive start to 2021 despite Lockdown-3, with improvements in both the first time conversion rate and sales volume. A first time conversion rate of 77.8% was 7.5% higher than in December, whilst sales volume was significantly higher – not that unusual given December is traditionally quiet, but a good result given it was not clear how long the current lockdown would continue.

First time conversion rate graph Jan 2021

The Glass’s Editorial team reported that buyer trends were similar to those observed in December, with lower graded cars continuing to struggle to achieve decent prices, or to even receive any bids at all. One interesting development was that the hammer prices of convertibles improved as the month progressed, even though much of the country was under snow!

Used Car Retail Market

With the country being in lockdown, and with no clear indication how long it would last, it was reasonable to expect used car retail sales for January to be relatively steady, and the figures suggest they generally were. The number of sales and their average value were very close to December’s results, at 100.2% and 99.1% respectively, and whilst the number of observations was generally lower in 2020, the overall trend for the average sale price was upwards. Remarkably, the average age of the cars was also virtually the same as for December – 49.5 months for January versus 49.4 months for December.

Used Car Retail Market Observations Graph - January 2020 to January 2021
Used car market average sale price graph January 2021

Glass’s live retail pricing tool GlassNet Radar includes data on the length of time cars spend on the forecourt before selling, and it reported that the average duration for January 2021 was 51.7 days. This was six days longer than in December, but that degree of increase is not unusual given the delays caused by the festive season and is only a little higher than the 49.9 days reported for January 2020.

Used car market average days to sell graph January 2021

Outlook

It is likely that the current lockdown will continue through to the beginning of March at least, so it is reasonable to expect that February’s used car wholesale and retail markets will perform in a similar fashion to January. Should there be an announcement of an easing of restrictions towards the end of the month, it may promote a surge in activity, especially in the auction market, but it is unlikely to lift the retail sector much, if at all, until those changes come into effect.

Launch Report: Hyundai Tucson – bolder and roomier

The new Hyundai Tucson has an assertive and bold design, with its front face combining the headlights and grille. The 3D rear-light signature echoes the progressive triangular headlight design and two-tone colour personalisation is now possible. As the new Tucson is longer and wider, it is roomier and more practical than its predecessor and has a large boot.

The modern and refined digital cockpit, featuring a flush-fitting 10-inch screen, is standard across the range and there is also a digital TFT screen directly in front of the driver. The materials, trim and build quality are all good and there are numerous ADAS and safety features, including a central airbag between the two front seats. A neat touch is the blind-spot monitoring system, which shows a digital feed from the left or right side of the car, depending on which direction is indicated.

The Tucson is offered with mild-hybrid (MHEV) petrol and diesel engines or as a full hybrid-electric vehicle (HEV), and a plug-in hybrid (PHEV) version will be available too. The trim lines are well composed and there are relatively few options, leading to well-equipped used cars.

With the leap forward in quality and roominess compared to its predecessor, the Tucson has the potential to attract a wider selection of consumers. The HEV version may present an attractive business proposition for buyers who are not yet ready to plug in.

Click here or on the image below to read Autovista Group’s benchmarking of the Hyundai Tucson in France, Germany and the UK. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Launch Report Hyundai Tucson February 2021

Surging demand for new BEVs mounts pressure on residual values

Residual values (RVs) of battery-electric vehicles (BEVs) in the big five European markets are lower than they were at the onset of the COVID-19 pandemic, in both value and retention (RV%) terms, except in the UK. Senior data journalist Neil King explores the latest developments and the challenges for used BEVs.

Registrations of BEVs in the European new-car market, comprising the EU and the UK, grew by 126.5% compared to 2019, to almost 650,000 units. However, the surge in demand for new BEVs is not reflected in Europe’s used-car markets. Consequently, their RVs after 36 months and 60,000 kilometres were weaker in January 2021 than when COVID-19 took hold in March 2020, except for modest growth in the UK.

‘New BEV sales have risen sharply to company-car users over the past 12 months, fuelled by the attractive benefit-in-kind tax rates. With few current incentives available for used buyers. However, there is concern that when these cars come to the end of their contracts, supply may outstrip demand, negatively impacting residual values,’ explained Jonathan Brown, car editor at Glass’s in the UK.

Residual-value development of BEVs, big five European markets, March 2020 to January 2021

RV development of BEVs graph, big five European markets, March 2020 to January 2021

Source: Autovista Group, Residual Value Intelligence

These developments are in stark contrast to activity across the whole market. In 2020, new-car registrations in the EU and the UK suffered an overall decline of more than 3.7 million registrations due to COVID-19, equating to a loss of a quarter of the volume. Buoyed by resilient used-car demand, RVs of all cars in the 36-month/60,000km scenario in the big five European markets had returned to pre-COVID-19 levels by mid-November 2020.

Oversupply risks

With price pressure on used BEVs already mounting, this amplifies the question; Who will buy Europe’s used-electric cars? Through a combination of government incentives, improved infrastructure, extended ranges, more choice, and the fear of CO2-emissions fines, forecasts point to electrically-chargeable vehicles gaining a market share of around 40% in Europe by 2030, 80% of them being BEVs. For BEVs alone, that creates a €92 billion remarketing challenge, which needs to be addressed.

Unless demand for BEVs gathers pace in Europe’s used-car markets, RVs will continue to suffer and there is a risk of oversupply to EV-import markets too. As yet, there are currently no signs of saturation on these markets, and the demand for BEVs in Norway, for example, is expected to grow by 13% annually over the next five years, according to Rødboka (part of Autovista Group) in Norway. However, this may no longer be sufficient to resolve the RV conundrum created by the government incentives for EVs across Europe.

‘Continuing the current government policy will continuously add pressure to the used EV market as volumes are still pushed. The ability of Norway, for example, to absorb German EVs has a very limited impact on the upcoming local problems, though it ‘helped’ in the past. The entire Norwegian new-car market is about 150,000 vehicles a year, so let’s assume they take 100,000 used cars up to four years of age per annum. Germany alone ‘produced’ 230,000 used EVs in 2020, with different future ages, depending on whether they were fleet or tactical registrations. Thinking optimistically of 60% being absorbed locally, how many of the remaining 90,000 used cars should Norway import to solve our volume problem? And registrations of new EVs are still growing,’ cautioned Andreas Geilenbrügge, head of valuations and insights at Schwacke.

Diverging values

RVs of BEVs are below those of petrol cars in all the big five European markets, except Italy. Even here, however, the gap has narrowed to BEVs only having a 0.7 percentage point (pp) advantage over petrol cars, compared to 4.6 pp in March 2020. Furthermore, the new purchase incentives for BEVs, introduced by the Italian government on 1 January 2021, will reduce their used prices and this minor advantage is therefore expected to turn negative imminently.

RV% development of petrol cars and BEVs, Italy, March 2020 to January 2021

RV% development of petrol cars and BEVs graph, Italy, March 2020 to January 2021

Source: Autovista Group, Residual Value Intelligence

In the other major European markets, the RV disadvantage of BEVs compared to petrol cars has widened since March 2020. The greatest divergence has occurred in Germany, where the gap has widened by just under 4 pp and stood at 10 pp in January 2021.

The divergence accelerated notably following the introduction of enhanced incentives on 1 July 2020, supporting the assumption of a forthcoming negative impact on values of BEVs in Italy. The federally-backed buyer incentive scheme doubled to €6,000 for BEVs costing less than €40,000, such as the Volkswagen ID.3. When paired with the manufacturer bonus of €3,000, customers are able to save €9,000. BEVs with a net price between €40,000 and €65,000, like the Audi e-Tron Sportback, are eligible for €5,000 in government subsidies, alongside a €2,500 OEM bonus.

‘COVID forced the German government to support the ‘suffering’ automotive industry. And as it wasn’t popular to drive internal-combustion engine (ICE) sales, they decided to make a push on BEVs and plug-in hybrids (PHEVs), but not standard hybrids (HEVs), by doubling the incentives. But the lack of used-EV support puts double pressure on RVs by lowering transaction prices of new EVs with the incentive, while not incentivising used examples,’ Geilenbrügge emphasised.

RV% development of petrol cars and BEVs, Germany, March 2020 to January 2021

RV% development of petrol cars and BEVs graph, Germany, March 2020 to January 2021

Source: Autovista Group, Residual Value Intelligence

The biggest gap in RVs between BEVs and petrol cars remains in France. The difference in January 2021 stood at 18.6 pp, although this is only slightly wider than the 17.9 pp gap in March 2020. On a positive note, this sizeable gap in France should at least stabilise following the introduction of a €1,000 incentive for used BEVs on 1 January.

‘Despite the introduction of the bonus on the used-car market, sales of used BEVs remain low. France is still lacking charging points and 25% of them are out of order, which is not supporting the development of the used-car market. The only impact of the bonus, from my point of view, would be to stabilise RVs a bit more,’ commented Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.

RV% development of petrol cars and BEVs, France, March 2020 to January 2021

RV% development of petrol cars and BEVs graph, France, March 2020 to January 2021

Source: Autovista Group, Residual Value Intelligence

All governments should look into providing incentives to encourage used-BEV ownership, but these do not need to be straightforward purchase incentives. Lower energy costs for charging BEVs and visible expansion of the charging network would also be powerful signals.

Autovista Group is hosting an online seminar on the remarketing risk of electric vehicles on 23 February – join here.

Head-up display: gimmick or godsend?

As in-car displays grow in size and scope, the amount of attention they can draw away from the road increases. While some infotainment systems feature touchscreen with haptic feedback, designated control wheels and voice-activated commands, there looks to be a more transparent solution. Are head-up displays (HUDs) the safety feature consumers never knew they needed, or just another gimmick to get in the way? Autovista Group Daily Brief Journalist Tom Geggus goes looking for answers.

The list of cars featuring HUDs is growing, from the Jaguar I-Pace to the Hyundai Kona. These displays are getting smarter too with the implementation of augmented reality (AR), like in the Mercedes-Benz S-Class and Volkswagen ID.3. Panasonic got in on the action as well, revealing its own AR HUD at CES 2021. This rapid uptake is predicted to push the technology’s market value over $9.8 billion (€8.1 billion) by the year 2027, according to Yahoo Finance.

Mike Juran
Mike Juran, Altia CEO

The boom is set to reach far beyond passenger cars, as holographic displays pop up in commercial vehicles. Altia Design Research Lab showcased its heavy goods vehicle (HGV) HUD at CES this year.

Built alongside the Texas Instruments DLP team and Ceres, it features a long list of capabilities, including advanced driver-assistance system (ADAS) warnings, bridge-height information, battery temperature cautions, front blind-spot detection and turn-by-turn directions. In an interview with Autovista Group’s Daily Brief, Altia’s CEO Mike Juran explained why a commercial setting demonstrates not only what a HUD is capable of, but where it could yield the some of its most promising results.

‘Combining the HUD with the truck is solving one of our bigger problems on the road, as it relates to safety, productivity and driver engagement,’ said Juran. ‘If we did nothing in the next several years and could outfit all of these heavy trucks with HUDs, and then move that into the passenger vehicle space, I think we will have done society a great service.’

Heads up

George Palikaras
George Palikaras, META CEO

Alongside intelligent personal assistants, autonomous driving capabilities, and solar-powered cars, holographic displays belong to a near-sci-fi class of vehicle technology. So how does this futuristic system work in practice, and what is involved in developing it?

Smart materials and photonics company, Metamaterial Inc (META), designs and manufactures advanced materials and performance function films engineered on a nanoscale, all to control light.

The company fabricates its own holographical combiners, a key component in a HUD’s optical system. Therefore, META’s president and CEO, George Palikaras, is in a perfect position to help illuminate the complexities of these transparent displays, and what they have to offer.

Palikaras told Autovista Group’s Daily Brief that it is important to recognise how many technologies are involved when it comes to HUDs. While the driver might only see one seamless display in front of them, this projection is the result of multiple systems all working together, from augmented-reality software to the projector.

The performance of these elements can then vary depending on what they are made of. ‘Are you using glass? Are you using plastic? Are you guiding the light? Or are you reflecting the light off a surface?’ Palikaras asked. ‘So, there are considerations when it comes to the methodology of controlling the light, and that is one of the things that we specialise in at META.’

A high bar

Other sectors have not missed the potential of holographic technology. Smart eyewear has drawn the attention of major consumer electronics companies. For example, in June last year smart-glasses developer North was acquired by Google, even after the internet giant’s turbulent experience with its own attempt at eyewear called Glass, which is now confined to industrial applications.

Not unlike the consumer-electronics sector, the automotive industry has also seen numerous attempts to develop holographic displays since GM first debuted the technology in 50 of its 1988 Oldsmobile Cutlass convertibles.

But as the automotive industry travels further down the digital rabbit hole, crossovers like these will only multiply. This could benefit the development of transferable systems as carmakers team up with tech companies to pool knowledge and resources. However, it also sets the automotive industry on a direct collision course with consumer electronics, as both sectors vie for essential components to build more advanced systems, as can be seen with the current semiconductor shortage.

Development is even tougher for vehicle-based holograms, Palikaras explained. It all comes back to safety because, unlike in the consumer electronics sector, materials used in a car must be qualified. ‘That means that they have to be tested rigorously, in extreme conditions. More than 100 degrees centigrade, 100% humidity,’ he said. This is so the display could last the lifetime of a vehicle without failing and potentially putting the driver and everyone around them at risk.

Furthermore, HUDs must avoid creating their own safety risks. Holographic gratings and optical elements are known to cause flares, when light comes in at a particular angle, gets captured by the hologram and appears in front of the driver in a rainbow-like flash effect. To mitigate what is fundamentally a physics problem, the materials within the HUD need to be controlled Palikaras said.

‘How did you do that?’ he asked. ‘Well, we do that at meta, because we understand how light interacts with the nanoscale. We can pattern, the glass or the hologram in such a small minute level to fix these challenging problems.’

Safety first

While HUDs should be built to stand the test of time, to outlast challenging conditions and to ensure road safety, consumers also need to see the benefits of such a system. After all, why pay a premium for a device whose functions are already covered by the speedometer and instrument dial. With the inclusion of AR, developers are revealing just how transformational this technology could be to automotive safety.

By tying different vehicle sensors to the HUD, the display becomes capable not only of projecting speed and directions but also visually integrating cues. This can include transparent directions that overlay the road ahead so the driver knows exactly where to turn, avoiding confusion and potential journey disruption. This application is already showcased in vehicles like VW’s ID.3.

https://youtube.com/watch?v=03n2H_EY2zA

As can be seen with Panasonic’s latest offering, by equipping these displays with sensor data, the potential safety advantages are numerous. ‘Imagine you’re driving at night, and the infrared sensor that can see through the darkness sees an animal that potentially will cross your path on the highway,’ Palikaras said.

‘You would have not seen that animal crossing,’ he continued. ‘And now you have the ability, not only for the sensor to pick it up. But to show you exactly where the animal is with a little red box highlighting it.’ While some sensors are capable of seeing what a driver may not, the AR HUD is the medium through which the driver is kept in the loop.

‘The future’

So, are HUDs a gimmick? Not according to Palikaras. ‘I think it is the future, he said. ‘Once companies start collaborating with each other to come up with solutions, that is where I think the magic will happen.’

As large developmental strides are being taken in the automotive industry, HUDs are not solely about removing the need for the driver to look down at the instrument panel. Now they are capable of providing additional information which could prevent a collision that might have otherwise happened. If this technology can save even one life, surely it must be considered a godsend.

January 2021: New car registrations

With Lockdown-3 in full force dampening the spread of COVID-19, inevitably January new car registrations suffered. Although retailers have created ‘click and collect’ processes to maintain a level of sales, customers still prefer to see vehicles before they buy. It came as no surprise to see registrations falling 39.5% versus January 2020 (already down 7.3% versus January 2019). According to the Society of Motor Manufacturers and Traders (SMMT), total registrations for January stood at 90,249 cars, the worst start to a new car market for 51 years.

Demand was subdued for both the private and fleet sectors, with registrations down 38.5% to 37,946 and 39.7% to 51,002 respectively, while the small business sector was down 56% to just 1,301.

January 2020-2021 sector split graph

Data courtesy of SMMT

Pure diesel registrations fell 62.1% compared to last year to just 11,083 units. This is a collapse of 86% from their peak January 2016 figure of 82,311, even when you add the mild-hybrid diesel registrations of 6,221, a total of 17,304 is a decline of 79% from the high point.                                                                                                                                             

Despite the gloomy picture, there are some bright points. The SMMT reports that new emissions figures show 2020 registrations are the cleanest vehicles in history, with average CO2 emissions falling by 11.8% on the previous year. January registration figures also show battery electric vehicles (BEVs) increasing by 54.4% to 6,260 with a market share of 6.9%. Plug-in hybrid (PHEV) registrations also rose in January by 28% to 6,124 units.

The chart below compares the alternative fuel vehicle (AFV) volume in January 2021 with the prior year.

AFV Registration Comparison Graph

Data courtesy of SMMT

Looking ahead, February is usually the quietest month of the year for registrations with consumers preferring to wait until the new plate in March. This February will be no different, with an expectation for another fall in registrations as the nationwide lockdown will not be lifted until the beginning of March at the earliest. If the vaccine roll-out success continues and COVID-19 cases continue their rapid decline, then showrooms will reopen improving consumer confidence, translating into an upswing in business in the second quarter and beyond.   

New Light Commercial Vehicle (LCV) Market January 2021

The results for January show an overall positive start for 2021. However, this positivity masks large declines in all sectors except large vans. This sector single-handedly drove demand during January.

SMMT registration data indicates the LCV market grew by 2.0% in January. The 24,029 registrations, was 472 units more than in January 2020 and was the highest January volume since 1990 (24,094).

Breaking down the results reveals the only highlight was a 25.4% registration increase for vans between 2.5-3.5 tonnes. Registrations for vans under 2.0 tonnes declined 50.1% whilst vans between 2.0-2.5 tonnes declined 16.2%. Whilst pickup registrations declined by 25.8%, 533 new plug-in battery-electric LCVs joining UK roads, increasing the BEV market fuel type share to 2.22%.

Top five LCV registrations

Top five LCV registrations table Jan 2021

Brexit

The pandemic continues to affect the whole UK economy. While the UK automotive industry avoided tariffs following Brexit, the Rules of Origin (RoO) requirements hidden within the new legislation are creating new barriers to trade.

Before 1 January 2021, automotive products legally made in the UK could be sold anywhere in the UK and the EU. From 1 January 2021, automotive manufacturers must provide proof that at least 40% of the value of the parts in a finished vehicle exported to the EU originated in the UK. This threshold climbs to 45% in 2023 and 55% in 2027.

With increasing battery-electric vehicle production, the need for domestic battery production is vitally important. Without this, OEMs are less likely to invest in the UK.

The future must involve measures that can deliver long-term changes in the industry. With ambitious targets set to address climate change and air quality goals, the fastest way to achieve these goals is to instil business confidence and encourage the take-up of the latest low emission vehicles.

January used Light Commercial Vehicle (LCV) overview

The first half of January saw the usual seasonal slowdown, with conversion rates and prices easing in line with some of the older and higher mileage stock on offer. Demand remained strong for the cleanest retail stock, with the shortage of later plate Euro 6 vehicles forcing prices ever higher. With a lack of new de-fleet stock to ease supply and demand issues, prices look set to remain high for at least the first half of 2021.

With new vehicle production still below pre-pandemic levels, there is a severe shortage of stock, which is forcing fleets to run their vehicles for longer. As we move through the year, the rollout of the global vaccination programme and the easing of lockdown measures will determine how quickly the new market recovers, in turn, increasing volume in the used market.

With the recent lifting of government restrictions on the sale of repossessed vehicles, the used market should benefit from an increase in volume over the next few months.

Although sales at auction in January decreased compared to January 2020, conversion rates over the period increased by 2.7%. To highlight the shortage of late-year stock in the marketplace at present, only 6.5% of all vehicles sold during the month were less than 2 years old, whilst Euro 5 stock made up just under 31%.

Medium-sized vans again proved the most versatile and popular in the used market, accounting for over 35% of all sales, followed by Small vans with 30%.

January in detail

Glass’s auction data shows the overall number of LCV sales in January declined by 30.5% versus December 2020, whilst first-time conversions remained steady at 85.7% (85.9% – December).

Average sales prices paid in January increased by 8.2% versus December and were over 33% higher than the same point last year. January’s prices were the highest in the last twelve months and 3.5% higher than the previous best recorded in October. The average age of sold stock decreased from 72 months in December to 68.8 months in January and was 6.6 months younger than the same point last year.

In line with sales of younger vehicles, average mileages also decreased from 78,005 miles in December to 75,532 miles in January and were nearly 6,200 miles lower than at the same point last year.

Glass’s continues to monitor the LCV market closely and has an open dialogue with auction houses, manufacturers, leasing and rental companies, independent traders and dealers as well as the main industry bodies. This information, combined with the wealth of knowledge in our CV team ensures Glass’s valuations remain relevant in the market place.

Podcast: Jumpstarting 2021 – registrations, electromobility and shows

The Autovista Group Daily Brief team takes a look into some of the biggest automotive news stories of the past fortnight. Phil Curry and Tom Geggus discuss January’s new-car registrations, how carmakers like Ford, Hyundai, and Daimler are tackling electromobility, and whether there should be automotive shows this year.

https://soundcloud.com/autovistagroup/kickstarting-2021-registrations-electromobility-and-motor-shows

You can listen and subscribe to receive podcasts direct to your mobile device, or browse through previous episodes, on Apple, Spotify, Google Podcasts and search for Autovista Group Podcast on Amazon Music.

Show notes

EU new-car registrations to start recovery in second half of 2021

Deceptively shaky start to 2021 new-car registrations across Europe

Germany: new-car registrations down 31% in January

UK new-car market suffers ‘worst start to the year since 1970’

EVs make great strides across European markets in 2020

Ford trebles size of UK EV-charging network

Hyundai boosts zero-emission mobility

Daimler to become Mercedes-Benz as it spins off truck business

Will there be a physical motor show in 2021?

Glass’s predictions for 2021

The Automotive Industry might have thought they’d seen it all in 2020. But the market fluctuations were merely a preview of what’s to come in 2021.

Just to take a quick look back, the car and LCV markets gave everyone a scare in 2020 when they bottomed during the first lockdown. But then the market reopened and surged forward until the year-end. Glass’s Predictions video for 2021 discusses the car and LCV markets and what our expectations are for both the new and used vehicles. Anthony Machin, Glass’s Head of Content and Product, hosts the video and discusses the way forward for automotive over the course of this year.

This video includes:

  • New and used car Predictions for 2021
  • New and used LCV Predictions for 2021

Lockdown-3 Stalls UK Car Sales

Lockdown-3

Unsurprisingly, the latest national lockdown has affected new car sales. Registrations fell 39.5% compared to January last year, according to figures released by the Society of Motor Manufacturers and Traders (SMMT).

The latest indications from the Government suggest a gradual unlocking of the economy once schools have reopened. The Government have already confirmed this will not be earlier than March 8. When schools start reopening, they will reopen in phases enabling student COVID-19 testing.

Following the schools reopening, it remains unclear which sectors of the economy will reopen first, whilst some businesses may not reopen until April at the earliest.

It will be damaging for new car registrations if dealerships do not physically open in March. Usually the largest registration month of the year, March is a pivotal month for the new car market. However, with dealers physically closed in January and February, the outlook for March was already bleak.

The used car market also suffered in January with dealers limited to offering ‘click and collect’ services. As a result, wholesale activity has been relatively poor, with dealers seldom needing to replenish their stock.

The Glass’s editorial team watched over 20 online auction sales in January. They report that despite low numbers of auction entries, conversion rates were only around 50%. Overall, the percentage of cars sold at the first time of asking was 77.8%. This result is over nine percentage points lower than last year.

Looking ahead to the rest of the year it is difficult not to be pessimistic about the new car market. A prediction of around 2 million cars seemed sensible just six weeks ago. This prediction is already at risk with March’s usual high registration total under threat. Glass’s expects an increase in used car activity when Lockdown-3 ends, it may not be quite as buoyant as when Lockdown-1 ended but should help dealers recover some of the ground lost in quarter one.

E-volution

The Quiet BEV-olution

The UK Government has an ambitious plan to stop the sale of new cars and Light Commercial Vehicles (LCV) with pure internal combustion engines. Originally due to come into force in 2040, the Government has brought forward the ban to 2030. Between 2030 and 2035, new cars and vans can be sold with internal combustion engines if they can drive a significant distance with zero emissions (for example, plug-in hybrids or full hybrids), and this will be defined through consultation.

Although other vehicles, such as motorcycles and Heavy Commercial Vehicles (HCV), will eventually switch to less polluting fuels, for the moment they are not subject to the current government plans. In itself, this is interesting as there are cleaner alternatives to diesel including natural gas, battery-electric and fuel-cell electric. For the two-wheel market, while there is a growing selection of electric machines on sale, the move to battery-electric is still in its infancy.  

With favourable company car taxation and an ever-growing selection of new models on offer with new technologies removing range anxiety, the battery-electric car revolution is gathering pace. In the used car market, work is ongoing to support the development of the used electric vehicle sales with further studies around the cost of ownership and usability of these vehicles.

The E-volving Used Market

Today, there are around 7,500 used battery-electric cars available to buy on the UK’s market-leading online advertising portal. Just fifteen months ago, when Glass’s conducted the same search, the number was just 1,500.

Used car buyers are starting to see EVs as an affordable option compared to traditional petrol, diesel and hybrid alternatives. According to dealers, the current sweet spot for many consumers buying used cars is around £5,995.

For consumers ready for the move to an EV at this price level, currently, there are just two models to choose from in any volume. These are the Renault Zoe and Nissan’s Leaf. Dealer forecourt prices start around £4,200 for a ten-year-old Leaf, but then there is often a battery lease cost on top of that starting at £80 a month. For some people, this is around what they might spend on fuel each month. Therefore, a low mileage user has to look very closely at other costs when switching to battery-electric, including the zero price road fund license, lower servicing costs and lower fuel costs. Some users will switch to enjoy the knowledge that they are reducing emissions in their neighbourhood, however many are unwilling to make such a gesture and still state range anxiety as a reason not to switch.

Residual value development

As one of the longest-running volume EVs in the UK, the Nissan Leaf is a good example to analyse used pricing trends. With a new model Leaf launched in 2018, there was a notable increase in first-generation used examples hitting the market through part-exchange. Despite a significant increase in volume, the average residual value of a five-year example increased. The following chart shows Glass’s trade value for the Nissan Leaf expressed as a percentage of original cost new price. This increase in value is due to a general increase in interest in EVs throughout 2019. This intensified further at the beginning of 2020 before levelling out as COVID-19 made its presence felt.

Average RV% of a 5yr old Nissan Leaf graph

Glass’s editors will continue to keep a close eye on the EV market, paying particular attention to the significant number of cars expected to enter used car channels over the next three years. New EV sales have risen sharply to company car users over the past 12 months, fuelled by the attractive benefit-in-kind tax rates. With few current incentives available for used EV buyers, there is concern that when these cars come to the end of their contracts, supply may outstrip demand, negatively impacting residual values.

Germany: new-car registrations down 31% in January

New-car registrations fell by 31.1% in Germany during January compared with the same month in 2020. A total of 169,754 passenger cars were registered according to the latest figures from the country’s automotive authority, the Kraftfahrt-Bundesamt (KBA).

This aligns with the Autovista Group expectation of a return to year-on-year declines of about 30% in countries where dealers were closed for physical sales. Germany is the largest European market affected in January, with the restrictions currently in place until 14 February.

The German market was also hampered by the return to a 19% VAT rate since 1 January 2021, which had been reduced to 16% from 1 July to 31 December 2020. Autovista Group estimates that this change advanced about 40,000 new-car registrations into December 2020, when the market rose 9.9% compared to the previous reporting period. Furthermore, the shortage of semiconductors will have invariably disrupted some new cars’ deliveries in the country last month.

New-car registrations, Germany, y-o-y % change, January 2020 to January 2021

Germany registrations 2020-2021 so far

Source: KBA

There were two fewer working days in January 2021 than in January last year. On a comparable working-day basis, Autovista Group estimates that registrations fell by about 23% in the last month, and annualised new-car demand was at 2.94 million units. As in France, Spain and Italy, the start to 2021 of Germany’s new-car market has been deceptively shaky.

Given the mitigating factors in January, this bodes relatively well for the German market, which Autovista Group currently forecasts will recover to 3.15 million units in 2021, 8% up on 2020. This is at the same level as the German automotive industry association VDA forecasts. However, the VDA rightly highlighted that 2021 will still be ‘significantly lower than the approximately 3.5 million new registrations of the years 2017 to 2019.’

‘We assume that the second half of 2021 will bring an improvement, if the progress in vaccination is so great that the pandemic can be noticeably contained in everyday life,’ commented VDA president Hildegard Müller. This echoes the EU-wide sentiment expressed by the European Automobile Manufacturers’ Association (ACEA). ‘The year 2021 will decide the future of the industry in Germany and Europe. We are at a turning point that will set the direction for the following decades,’ Müller added.

Brands and segments

German brands reflected January’s negative performance. Audi (down 47.4%), Mini (down 41.5%), and Ford (down 41.1%) saw the most significant declines. Meanwhile, Porsche posted the smallest losses, with a drop of 3.9%. Volkswagen maintained the largest market share, of 20.1%.

Among the imported brands, Tesla and Volvo exceeded their registration results for the same reporting period in 2020, up 23.4% and 9.4% respectively. In contrast, declines of more than 70% were seen at Jaguar and Honda (down 77.9% and 70.1% respectively), while Fiat recorded the smallest decrease of 14.8%. Skoda was the strongest imported brand for market share, with 6.7% of registrations.

Motorhomes were the only segment to achieve growth, of 5%, to capture a market share of 1.9%. Meanwhile, small MPVs saw the most severe decline at 63.6%, and full-size MPVs fell 55.3%, sports cars slumped by 43.2% and utility vehicles dropped by 42%. SUVs were the strongest segment with 21.9% of the market, despite a decrease of 26.4%, followed by the compact segment with a 19.1% share, down 32.2%.

Fuel types

Registrations of petrol-powered cars fell by half (50.3%) in January 2021 compared to the previous reporting period, taking 37.1% of the market. Diesel also dropped by 44.8%, representing just over a quarter of new cars (26.1%). In contrast, electrically-chargeable vehicles (EVs) saw year-on-year growth of 117.8%, with a total of 16,315 new units registered, taking their share to 9.6%.

Some 45,449 hybrids were registered in January, up 47.5%, while securing 26.8% of the market. A total of 20,588 plug-in hybrid units were registered in January, up 138.3%, with a 12.1% share. Natural gas (259) and liquefied gas (340) only accounted for 0.2% of the market last month, recording a combined decrease of 35.5%. The average CO2 emissions of newly registered cars was 125.9 g/km, representing a decrease of 16.9%.

The tipping balance towards EVs, and away from internal combustion engines (ICE), follows on from a trend recorded last year. In 2020, alternative drives made up of hybrid, fuel-cell, gas, hydrogen, and battery-electric vehicles (BEVs), claimed approximately a quarter of all new-car registrations. The German government set out COVID-19 recovery plans as a springboard towards a greener economy, with a greater emphasis on electromobility. In November, it committed a €4 billion stimulus package to the automotive sector, with funds channelled into the adaptation of production lines and incentivising the purchase of EVs.

Semiconductor shortages stunt automotive recovery

Vehicles are becoming smarter by the day, from automation to personalisation. But a major building block in these digital developments has hit a bottleneck. Autovista Group Daily Brief journalist Tom Geggus explores the world of semiconductors. Why is there a shortage, which OEMs have been affected, and how could this impact an automotive COVID-19 recovery?

To get notifications for all the latest videos, you can subscribe for free to the Autovista Group Daily Brief YouTube channel.

Show notes

Semiconductor shortage disturbs manufacturing

Semiconductor shortage continues to impact automotive production

Germany looks to Taiwan for semiconductor solution

EU new-car registrations plunged 24% in 2020