Article Type: Insight

Deceptively shaky start to 2021 new-car registrations across Europe

The European new-car markets of France, Italy and Spain all contracted in January 2021, compared to the first month of 2020. However, the shaky start to the year is deceptive for numerous reasons, explains Autovista Group senior data journalist Neil King.

The resurgence of COVID-19 cases and the economic repercussions continue to suppress the new-car markets of France, Italy and Spain. Registrations declined again year on year in January in all three countries, according to data released by the respective automotive trade associations.

New-car registrations, France, Italy and Spain, y-o-y % change, January 2020 to January 2021

Source: CCFA, ANFIA, ANFAC

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.

On an annualised basis, adjusted for working days, demand was above 1.9 million units in January. Demand will come under some pressure later in the year as incentives for battery-electric vehicles (BEVs) will be reduced by €1,000 from 1 July. However, assuming no further COVID-19 restrictions on dealerships in France, Autovista Group forecasts that the new-car market will grow by 18% in 2021, following the 25% contraction in 2020, to about 1.95 million units.

Fourth consecutive monthly decline in Italy

In Italy, the year-on-year downturn in January reported by the industry association ANFIA was 14%. This is the fourth consecutive month that the country is back in negative territory following the 9.5% growth in new-car registrations 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.

‘The opening month of 2021 was partly disadvantaged due to two fewer working days than in January 2020. Also, the first days of the month, with the last part of the holidays in the ‘red zone’, may have induced consumers to postpone purchases, despite the full activity of dealers, while the ongoing government crisis added a further uncertainty factor in an already particularly difficult historical moment,’ commented ANFIA president Paolo Scudieri.

‘It is probable that, in the absence of the incentive measures that came into force on 1 January, the market results would have been worse. There is a lot to recover, but we are confident that we will see a gradual restart of demand in the coming months,’ added Scudieri.

Assuming the crisis in the Italian government is quickly resolved and, moreover, there are no further COVID-19 restrictions on dealerships in 2021, Autovista Group forecasts that the Italian new-car market will grow by 21% in 2021, to about 1.67 million units. This is a higher growth rate than in France, but Italy starts from a weaker base, with registrations down 28% in 2020.

New-car registrations, France, Italy and Spain, y-o-y % change, 2020 and 2021 (forecast)

Source: CCFA, ANFIA, ANFAC (2020), Autovista Group (2021 forecast)

Sweet-and-sour Spain

In Spain, just 41,966 new cars were registered during January, equating to a dramatic contraction of 51.5% compared to January 2020, according to ANFAC, the Spanish vehicle manufacturers’ association. ‘There has not been a worse January since 1989, which had a monthly sales record like the current one,’ the industry body commented. However, adjusted for the two fewer working days, the market contraction was about 43%, and 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 in January as a result.

‘It can be said that the automotive market practically disappeared in January. Consumer confidence remains at a minimum, the relapse into the pandemic, with the consequent mobility restrictions, and the impact of storm Filomena have been decisive. To this, we must add that in December there were customers who advanced their purchase to avoid the registration-tax increase,’ commented Raúl Morales, communications director of the Spanish dealers’ association Faconauto.

‘January is not usually a month that stands out, but this year’s data highlight the delicate moment that the sector is going through and, what is more worrying, the difficult months that still lie ahead, at least during the first half of this year. Recovering demand is urgent to break this negative spiral. And we had the tool to achieve it: if the RENOVE plan had been continued, with some tweaking to improve it, we would surely be talking about minor drops and better prospects for the coming months,’ Morales added.

Nevertheless, ‘bitter-sweet’ Spain has definitely turned sour, and the higher WLTP-based taxes will continue to constrain new-car demand, especially in the early part of 2021. The poor economic outlook for Spain will also weigh heavily and the new-car market is expected to remain firmly below one million units in 2021. Autovista Group currently forecasts that demand will recover from the 32% loss in 2020, albeit only by 9% to about 930,000 units in 2021.

Launch Report: Opel/Vauxhall Mokka-e – clean design with quick charging

The Mokka-e introduces Opel’s (and Vauxhall’s) new design language, which presents clean lines that give the car a premium appearance. The new ‘Vizor’ front is especially distinctive with the lights and radiator, including the new brand logo, forming one cluster. The distinctive two-tone bodywork, differentiating the bonnet and the roof, offers multiple possibilities to personalise the vehicle.

The acceleration of the Mokka-e is rapid compared to most competitors with similar power output, going from 0-100km/h in 8.5 seconds, and the 50kWh battery gives it a range of 322 kilometres on the WLTP cycle. If buyers opt for the 11Kw on-board charger, the car can be recharged, using a 100kW DC fast-charger, to 80% battery capacity in 30 minutes.

The new ‘Pure Panel’ dashboard stands out in the interior, featuring either a 10-inch or 12-inch touchscreen, but there are also physical controls for the infotainment system and climate control. Good price positioning is coupled with a high level of standard equipment from the entry-level trim upwards. Even the basic version of the Mokka-e is equipped with climate control, an automatically-dimming interior mirror, and a light and rain sensor as standard. ‘Eco’ or ‘Sport’ driving modes and adaptive cruise control are also included, as are ‘Keyless Start’ and ‘Opel Connect’, with which drivers can request data about the car remotely via smartphone.

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

Launch report Opel/Vauxhall Mokka-e January 2021

Automatic Revolution Update

The automatic revolution

Historically, automatic gearboxes were a rare beast on cars in the UK, usually reserved for the larger prestigious cars of the day, like a Jaguar or Rolls Royce. They were expensive options and did not suit smaller, low power vehicles. Often considered sluggish, they usually had three gears and delivered poor fuel economy compared to a manual. They also tended to be expensive to repair, and had a reputation of being labelled as ‘not a true driver’s car’.

Times have changed, now automatics frequently have more gears than their manual counterparts, can be more economical, and many have racing-style steering wheel paddle shifters delivering a sportier more dynamic drive, when and if required.

Improving technology – increasing registrations

The chart below displays new car registration data from the Society of Motor Manufacturers and Traders (SMMT). The data shows registrations before 2018 favouring manual over automatic transmissions with registrations of automatic transmissions gradually increasing in market share from the start of the millennium to one in four cars by 2012. Since then the growth has been much faster, to the point where more than half of the cars registered in 2020 were automatic.

Automatic transmissions have gained ground against manual transmissions as technology has improved. Additionally, battery electric vehicles (BEVs) and hybrids are generally only offered with automatic transmissions. Taking account of electrified vehicle registrations and their year-on-year market share increases, the trend towards automatic transmissions will continue to grow.

UK car registration share by gearbox type graph

How have residual values fared over a similar timeframe?

The chart below shows the average residual value of three-year-old cars split by manual and automatic gearboxes, displayed as a percentage of original cost new price.

3 year old residual value % of cost new graph

Throughout the time frame in the chart above, there has nearly always been a premium for automatics. However, over recent years this RV premium has grown from around 2% to 4%, the exception being the Global Financial Crisis where markets including used cars were in turmoil. This trend is also seen in older cars, as shown in the chart below.

7 year old residual value percentage of cost new graph

Why has there been an increase?

Over the last twenty years, the sophistication and quality of automatic gearboxes continue to improve. These gearboxes are now available across almost all makes and models, and this improved choice has helped fuel the increase in registrations. Indeed, as mentioned before some automatics are more efficient and produce less CO2 than their manual counterparts, meaning lower Benefit-In-Kind taxation. In recent years, the increasing popularity and supply of alternative fuel vehicles (AFVs) such as BEVs and hybrids also supports the switch from manual gearboxes.

Another reason automatics are increasing in popularity is the cost. The expense of an automatic option is now lower in percentage terms, against cost new price, compared to 20 years ago. This, therefore, boosts residual value percentages, especially when in high demand as they are today.

Underlining the increase in demand for automatics, driving habits continue to change. According to data published by the DVLA, under 4% of automatic-only driving tests were taken 13 years ago, this has now increased to nearly 10%.

More choice, improved technology, increasing penetration of Alternative Fueled Vehicles, combined with increasing traffic congestion, makes choosing an automatic more compelling than ever. Taking account of limited used wholesale supply, the Glass’s team believes automatic values will remain strong.

Dealer sales restricted in half of Europe’s car market

Europe’s car dealers continue to face COVID-19 restrictions, with dealerships in some markets currently closed, except for servicing, maintenance and repair (SMR) work and online ‘click-and-collect’ sales. Autovista Group analysis uncovers that about half of Europe’s automotive market is currently affected by dealer restrictions. Senior data journalist Neil King discusses the findings.

Across many European markets, dealers are open for business as usual, or rather ‘business as unusual’, with strict COVID-19 rules in place, such as the mandatory wearing of face masks and the use of hand sanitiser. New-car registrations will be less severely impacted in these markets, compared to those where dealers cannot open for the physical sale of cars. Nevertheless, they are clearly not escaping COVID-19, and the resulting economic impact, unscathed.

Of the 15 European markets under review, dealers have been least affected in Sweden and Finland, where showrooms have never closed throughout the pandemic. ‘There are restrictions on the number of people allowed inside at the same time, but not a full closure,’ commented Johan Trus, Autovista Group head of data and valuations, Nordics. This has translated into comparatively robust new-car registrations, which were down ‘only’ 18.2% and 15.6% respectively in 2020.

Dealers in Italy and Spain have not been affected since the end of the first lockdown period, in May-June 2020, and all dealers in France have resumed normal activity since December. However, this does not preclude governments introducing lockdowns again in the future.

‘There are currently many discussions about whether we should go into a tighter lockdown, like the one we had from March to May-June, but there is no agreement yet. Our economy has been badly damaged and the decision may be to continue with at least low business activity. There could be a few specific cases in particular locations, however, in general, dealers remain open,’ said Ana Azofra, valuations and insights manager at Autovista Group, Spain.

Physical closures across half of Europe

Six of the markets under review by Autovista Group are currently affected by restrictions on the physical sale of cars at dealerships; Austria, Germany, Netherlands, Portugal, Switzerland, and the UK. Based on 2020 new-car registrations, 46.3% of Europe’s car market, consisting of the EU and EFTA markets, as well as the UK, is impacted.

Dealer status, January 2021, and 2020 share of European new-car market

Germany is the largest market where dealers are subject to physical closures, recently extended until 14 February. This is despite the fact that ‘wholesale and retail trade will remain open as far as possible. This includes grocery shops, pick-up and delivery services, beverage markets, pharmacies and drugstores, baby stores, medical and health-food stores, opticians, hearing-aid acousticians banks, post offices, dry cleaners and launderettes,’ clarified Andreas Geilenbrügge, head of valuations and insights at Schwacke.

Pick-up and delivery services do not apply to car dealers, although cars can still be collected in numerous states. ‘Most dealers offer sales contact by phone/online and a delivery service for test drives and purchased vehicles. Interestingly, there is one state, Thuringia, that has been able to keep car dealerships open,’ added Geilenbrügge.

Collection restrictions

In the other markets where dealers face restrictions, cars ordered online can be delivered but limitations on collection vary.

For example, in Austria and Switzerland, ‘the sale, handover and registration of a vehicle is still possible via click-and-collect but this has to be contactless,’ explained Robert Madas, Autovista Group valuations and insights manager, Austria and Switzerland.

Cars cannot be picked up, but can be delivered to a home or a public place in the Netherlands. However, ‘there may be an extra measure, a curfew from 8:30pm to 4:30am, which could impact dealers in delivering new and used cars at the customer’s home or in a public place,’ commented Nico VanHalst, Autovista Group residual value manager, Netherlands.

The pick-up and collection of cars is still permissible across the UK, although this has only been possible from an outdoor location in Scotland since 16 January, with deliveries direct to customers the only option prior to this.

Dealers in Portugal are the latest casualty, with changes introduced on 15 January that included the closure of car dealers, except for online sales. The restrictions on physical transactions by dealerships are expected to be more short-lived than in other affected markets. ‘The lockdown should end this week, on 30 January, as the maximum lockdown period allowed is 15 days and we are already in the second week,’ said Joao Areal, editorial manager of Autovista Group, Portugal.

‘However, these measures were changed in the middle of the month and I think they will continue with a new 15-day lockdown period starting on 31 January,’ he added.

Registrations implications

Following double-digit declines in new-car registrations in Europe in 2020, the magnitude of the recovery in 2021 fundamentally depends on the duration and severity of restrictions to tackle COVID-19 and the accompanying economic impact. In markets where dealers are closed for physical car sales, a return to the year-on-year declines of about 30% seen in France and the UK in November, when lockdowns were in force, can be envisaged.

Even in markets where dealers remain open, demand may not fare much better in the short term. In Belgium for example, ‘business volume looks rather disappointing, listening to dealers, despite what is loudly claimed. Forecasts are for a decline of 30% versus January last year, and the first quarter of 2021 should be down around 10% to 15%. The focus for brands is maintaining market share at all costs,’ commented Idesbald Vannieuwenhuyze, Autovista Group chief editor and valuations manager, Benelux.

However, ending on a more positive note, the development of online car-sales solutions, supported by ‘click-and-collect’ services and home delivery and test drives, has dramatically reduced the impact on registrations, which suffered losses around 90% in many markets during the first wave of lockdowns in 2020. These measures also have a positive effect, even when dealer activity is not restricted, as consumers increasingly prefer to shop online than at a physical location, including for cars.

‘Dealers have never been closed in Poland, but they still developed online solutions to reach more customers. For example, in Spring 2020, they offered vehicle delivery door-to-door to test and to buy. The bigger problem was the closure of registration offices, but this happened only at the beginning of 2020. The time to register used vehicles was also prolonged, but it did not block sales,’ commented Marcin Kardas, head of the Autovista Group editorial team in Poland.

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.

A follow-up article will look in depth at the acceleration of online car sales during the pandemic.

Podcast: The big tech trends of CES 2021

Which automotive technologies stole the spotlight at CES 2021? Autovista Group’s chief economist Dr Christof Engelskirchen, Daily Brief editor Phil Curry, and journalist Tom Geggus review some of the big tech trends at this year’s show.

They discuss the unveiling of new electric models, batteries and bases. How futuristic concepts like autonomous vehicles and VTOLs are taking off, the growth of infotainment systems and how this year’s digital platform changed CES.

https://soundcloud.com/autovistagroup/the-big-tech-trends-of-ces-2021

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

Five-minute-charge battery the answer to range anxiety?

CES 2021: The big automotive trends

CES 2021: Sono Motors unveils second-generation solar car

CES 2021: Panasonic looks ahead with augmented-reality HUD

CES 2021: Bosch focuses on sustainability and convergence

CES 2021: BMW showcases the latest iDrive system

CES 2021: Mercedes-Benz talks MBUX Hyperscreen

CES 2021: Indy Autonomous Challenge aims for extreme driverless testing

CES 2021: Mobileye to increase use of own autonomous technology by 2025

CES 2021: Magna champions LG venture as a new-entrant enabler

Five automotive tech advances to look forward to in 2021

Monthly Market Dashboard: Mixed RV movements across Europe in January

Autovista Group’s interactive monthly market dashboard (MMD) reveals a mixed picture of residual-value movements in January. Senior data journalist Neil King explores the analytics.

This month’s MMD reveals that the average residual value (RV) of cars aged 36 months and with 60,000km grew year on year in all the Big 5 European markets in January. However, values were lower than reported for December in France, and only rose modestly month on month in Germany and Spain. Italy and the UK enjoyed month-on-month pricing growth of 9.7% and 5.3% respectively.

RV retention, represented as a percentage, grew year on year in all markets except Germany. The highest growth in RV-percentage terms was in the UK, where the average was 48%, equating to an 8.4% change compared to January 2020. Compared to December, RV retention was lower in France and Germany, and rose by a modest 1.1% in Spain. Again, Italy and the UK enjoyed month-on-month pricing growth, of 9.9% and 2.9% respectively.

The UK enjoyed the strongest rally in used-car prices after Europe emerged from the first wave of lockdowns in summer 2020. This was driven by the release of pent-up demand, and a starker vehicle-supply challenge than any other market, which translated into higher RVs as used-car demand outstripped supply.

These RVs descended from their great height in late October as pent-up demand was broadly satisfied and new-car supply improved. However, with the UK back under lockdown restrictions as it seeks to stem a sharp rise in COVID-19 cases, and Brexit impacting new-car supply and prices, residual values are rising again.

Restrictions slow sales

Three-year-old cars are selling more slowly than a year ago in France, Spain and the UK. Moreover, the average number of stock days rose in all the major European markets over the last month, compared to December, as restrictions, including the closure of dealerships (except for online sales and servicing/repairs) in Germany and the UK, hinder transactions.

The greatest slowdown in the average number of days for 36-month-old cars to sell, compared to the December 2019 snapshot, was in the UK. Three-year-old cars are now moving on after an average of 48.5 days, up 14.5% from 40 days in December. This also means France is now the market with the quickest turnaround times, with cars selling after an average of 46.5 days.

The two fastest-selling cars in the major markets in January 2021 are both in Italy. The Dacia Duster and Volkswagen Polo are taking 26 days and 31 days respectively to find a new home. In third place is the Audi A1 in France, which needs just under 32 days to be rehomed.

Negative RV outlook

The new MMD also features the latest Autovista Group RV outlook for the major European markets. Despite the mixed RV movements in January, 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 December update, the RV outlook was improved slightly for France and the UK, but values are still forecast to decline in 2021, by 0.4% and 1.4% respectively. Used-car prices are forecast to decline by 0.7% in Germany and 1.1% in Spain. The weakest outlook is for Italy, where RVs are forecast to be 3.9% lower than their current level at the end of 2021.

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

EU new-car registrations plunged 24% in 2020

Autovista Group senior data journalist Neil King explores the December and full-year 2020 figures released by the European Automobile Manufacturers’ Association (ACEA). Second-wave lockdowns continued to suppress new-car registrations at the end of the year, but some markets were boosted ahead of tax changes from 1 January 2021.

New-car registrations in the EU declined 3.3% year-on-year in December. Volumes dipped to 1.03 million units, down from over 1.06 million units in December 2019. This was the least severe monthly decline in the market since September, the only month in the year that saw the market grow. As Autovista Group predicted in December, EU new-car registrations plunged by an unprecedented 23.7% in the year as a whole.

EU new-car registrations, year-on-year % change, January to December 2020 and year-to-date

Source: ACEA

The modest EU-wide downturn in December was expected as the double-digit year-on-year declines in France and Italy were counterbalanced with stability in Spain and growth in Germany.

In France, new-car registrations were 11.8% lower in December 2020 than in the same month of 2019. This is a significant improvement on the 27% contraction in November, the largest monthly decline in the country since May, as dealers reopened on 28 November following a lockdown.

New-car registrations declined 14.9% in Italy last month. Aside from restrictions in the country, the decline in December was also due to the exhaustion of scrappage incentives. Some consumers also postponed purchasing a new car as the Italian Parliament has approved an amendment to the 2021 Budget Law, which introduces new measures to renew the vehicle fleet with less polluting and safer cars.

In Spain, just 13 fewer new cars were registered than in December 2019, as consumers took 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. However, this is bitter-sweet for Spain as the new WLTP-based taxes will reduce demand, especially at the start of the year, and the market is expected to remain below one million units in 2021.

The German market ended 2020 on a marginally positive note. A total of 311,394 passenger cars were sold in December last year, up 9.9% on December 2019, partly fuelled by consumers beating the return to a VAT rate of 19% from 1 January. The rate had been reduced to 16% between 1 July and 31 December 2020.

However, the government imposed a strict lockdown again, meaning car dealerships have been closed since 16 December. This initially applied until 10 January, but climbing infection rates have triggered an extension of the country’s lockdown measures until the end of January. This makes a positive start to this year seem even less likely as dealerships must remain closed, except for the service departments. While Autovista Group’s Schwacke expects to see a recovery to just under 3.1 million new-car registrations in 2021, it predicts figures will be below those in previous years, and significantly below 2019’s peak.

New-car registrations, year-on-year % change, December 2020 and year-to-date

Source: ACEA

The majority of EU new-car markets contracted last month, but eight smaller markets posted growth, in addition to Germany. Double-digit improvements were achieved in Denmark, Ireland, Lithuania and Romania. However, year-on-year contractions of more than 25% were reported in five markets; Bulgaria, Croatia, Latvia, Slovenia and Sweden.

The modest market downturn in December naturally continued the improvement in the year-to-date contractions, which bottomed out at 41.5% in the first five months of the year. The greatest loss among major EU markets was in Spain, which contracted 32.3% in 2020, ahead of only Portugal (down 35.0%), Bulgaria (down 36.8%) and Croatia (down 42.8%).

The prevalence of COVID-19 infections, the severity, duration and geographic spread of lockdowns, and the economic fallout, will define how Europe’s new-car markets perform in 2021 and beyond.

Manufacturer performance

The majority of the leading European carmakers registered fewer new cars in the EU in December 2020 than in December 2019. Mazda and Mitsubishi suffered the greatest losses, with registrations down by more than a quarter year on year. However, the Volkswagen Group registered 9.7% more cars in the EU during the month than in December 2019, in line with the German market’s growth. Fiat Chrysler Automobiles (FCA) and the PSA Group, merged now as the new firm Stellantis, also managed to post year-on-year growth, of 9.3% and 2.9% respectively, but Toyota was the strongest performer by far, increasing registrations by 21.9%.

All manufacturers endured double-digit declines in 2020 as a whole, with only four containing losses to less than 20%; BMW Group, Hyundai-Kia, Toyota and Volvo.

Across Europe, Autovista Group expected manufacturers with a strong electrified portfolio to perform comparatively well as consumers are less likely to be tempted by the used electric vehicles coming through. 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. Toyota was the best-performing manufacturer in the EU new-car market, albeit with registrations down 12.8%, supporting this hypothesis.

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.

Vendor opportunities at online sales

One of the biggest step-changes in vehicle remarketing happened in 2020 as a result of COVID-19. To keep the used car market moving throughout lockdown, auction companies switched to an online-only sales model. Whilst nothing new for some companies in the sector, for most auctions, online business only accounted for a part of their sales. Whilst online buyer numbers have grown in recent years, full engagement was not predicted in the short term, with a significant hardcore of buyers still preferring to attend physically so they could touch and personally inspect the stock on offer for themselves.

The result was surprising, strong online buyer engagement from the start. This grew quickly to the point where some auction groups are not planning to recommence physical auctions, as online-only has proved so successful. In the current climate with the COVID-19 pandemic dominating the way we live our lives, it is perhaps understandable that buyers will not want to mix with others in auction halls. Additionally many have seen the benefit of being able to access multiple sales across the country on the same day, increasing the pool of stock they can choose from, rather than committing to attend one physical site. Not to mention buyers no longer need to travel and stand in what can be at times very cold auction halls. That said, some auctions will continue to operate traditional physical auctions and these are likely to remain well attended.

The rapid increase in online engagement has also changed the way that trade buyers assess stock condition. No longer able to physically inspect vehicles for themselves, they now rely on photography, condition reports and auction grading. As a result, vehicles with condition issues are easily highlighted, impacting hammer prices.

Many buyers shy away from vehicles towards the higher end of auction grades with condition issues, as it delays the time taken to get them on the forecourt, with grades 4 and 5 often achieving disproportionately lower bids. Most buyers appear content to bid in line with Glass’s trade value for grade 3’s and even more for grade 2 and 1. The question here is the potential opportunity for vendors to refurbish vehicles before a sale, to maximise their returns.

Analysis conducted by Glass’s shows the average price gap between a grade 4 and grade 3 condition car in 2020 was £510 as shown in the chart below, with the gap increasing in the second half of the year once the major auction groups switched to online-only.

The analysis is based on auction observations gathered throughout 2020 but excludes the lockdown months of April and May. Glass’s analysed typical Fleet aged cars between 2.5 and 4.5 years of age. It is clear to see the opportunity is there for vendors to maximise their returns by refurbishing cars from grade 4 to grade 3.

It is also evident that there is an opportunity to turn grade 3’s into grade 2’s, although in 2020 that was more pronounced following the end of Lockdown-1 and throughout the second half of the year. Whereas the gap between grade 4 and 3 is consistent throughout the year. Of course, refurbishment is an investment and costs vendors in terms of money and time. However, it is worth serious consideration as not only does it increase hammer prices it also enhances a vendor’s brand reputation, as buyers become used to improved condition standards being consistently offered.

Used Car Market Update December 2020

Used Car Auction Wholesale Market

Finally over, 2020 will be remembered above all for a certain virus that wreaked havoc around the world and across our global industry. For a whole year, COVID-19 has affected every aspect of our lives and it will have a clear effect on 2021. Lockdowns, mask-wearing and travel restrictions, unimaginable this time last year, have become part of our life and have unsurprisingly impacted the UK’s car markets.

New car registrations were down almost 30% due to reduced demand and severely impacted new car supply. Used car sales were also down, although it was good to see how quickly the used car retail sales switched to safely distanced online sales processes. Due to the various travel and gathering restrictions, auction providers suspended physical sales and now rely entirely on online auction portals. Fortunately, buyers adapted quickly and whilst overall sales volume for 2020 was down from 2019, first-time conversion rates and average sales prices were both up versus 2019 (3.6% and 20.6% respectively).

Overall sale volume 2020 versus 2019 December 2020

Specifically analysing December with Glass’s key metrics of first-time conversion rate and percentage of original cost new: the conversion rate of 72.4% was 5.2% higher than in November but almost 13% lower than the 85.3% achieved in December 2019. The average percentage of the original cost new was up 3.0% and 7.4% against November 2020 and December 2019 respectively. These results reflect the trends seen throughout the year, fewer cars selling with values holding up well. Given the circumstances, this is more positive than the expectations suggested.

First time conversion rate graph December 2020

Percentage original cost new graph December 2020

Despite their increasing popularity in the new car market, demand for HEVs (Hybrid Electric Vehicles) and BEVs (Battery Electric Vehicles) at auction continues to be lower than their ICE (Internal Combustion Engine) equivalents. Additionally, cars that require preparation work or are lack specification are also proving less desirable. This trend became more apparent as 2020 progressed. It appears buyers will still pay good money for the “right” stock, however, as times are more challenging, buyers are less keen to buy cars requiring additional preparation or that are outside of their comfort zones.

The graph below shows first-time conversion rate by fuel type and indicates that buyers are still more comfortable buying petrol and diesel cars rather than alternative fuel types. Petrol and diesel-powered cars achieve virtually the same conversion rates, with hybrids scoring a lower value and BEVs most susceptible to changes in supply and demand.

First time conversion rate graph split by fuel type December 2020

Used Car Retail Market

December is traditionally a three-week month due to the festive break. With the challenges of the November lockdown in England and other restrictions across the UK, the number of used car retail sales was 7.9% lower than December 2019 and increased 9.4% versus November 2020. Interestingly, whilst the average sale price was not too dissimilar to the averages for November 2020 and December 2019 – 1.5% higher and 0.8% lower – the average age of the cars sold, at 49.4 months, was 1.8 months younger than November but a notable 9.4 months older than in December 2019.

Glass’s Live Retail pricing tool measures the length of time a car spends on the forecourt. This is a useful barometer of the state of the used car retail market – the days to sell are lower when there is good demand and higher when times are tougher.

The average in December was 45.5 days to sell. This was 7.6 days longer than in November, but only 0.8 days longer than in December 2019, so in keeping with the time of the year. To achieve these sales, the average discount required was also higher in December than in the previous month, up from 2.5% to 3.1%, but still favourable when compared to the 3.7% average discount for December 2019.

Average days to sell graph December 2020

Used car sales outlook

With the UK once again in a state of lockdown, the UK’s used car market has got off to a subdued start. The rollout of the vaccination programme and the agreement of a Brexit deal will help promote a degree of positivity and should translate into a recovery of the markets, although this will not be truly apparent until the second quarter of the year.

New car registrations were 29.4% down in 2020 from the total achieved in 2019 and whilst volumes will recover through 2021, registrations are unlikely to achieve “normal” levels this year. There are concerns that the significant reduction of registrations in 2020 will decrease the supply of sub 24-month-old “nearly new” vehicles, particularly diesel-powered cars. This concern is illustrated by the 2020 market share for diesel. The diesel market share decreased from 25.2% in 2019 to 16.0% in 2020 and equated to a 55% drop in volume. Petrol-power also saw large drops – although not to the same scale – which will also lead to a shortage of supply.

Alternative fuel vehicles

New car registrations in 2019 were primarily driven by availability rather than demand. Therefore the apparent swing towards alternative fuel should be viewed with a degree of caution. It is true to say that the market is undoubtedly moving away from pure ICE to alternative fuel vehicles, but 2020 was not a normal year and makes valid conclusions difficult to make. Indeed, 2021 may see supply distorted again, potentially in favour of ICE as manufacturers attempt to catch up on deliveries delayed from last year. However, with the increasing availability of PHEVs, HEVs and BEVs these powertrains will likely continue to take market share from traditional ICE variants over the coming months and years and continue to change the availability of fuel types at auction.

Moving forward, what can be said with a fair degree of certainty is that 2021 is going to be another “fascinating” year for both new and used car sales, with a much higher percentage of online sales than ever before.

CES 2021: The big automotive trends

There were plenty of automotive products and systems taking centre stage at CES 2021, which took place entirely online. Autovista Group Daily Brief editor Phil Curry and journalist Tom Geggus discuss developments from the show across the themes of electromobility, autonomous technology, infotainment and personalisation.

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

Launch Report: Ford Mustang Mach-E – attractively positioned

Ford has used the Mustang name to widen the appeal of the new Mach-E electric SUV. The model incorporates some Mustang design elements, such as the light signatures, and there is not a Ford badge anywhere on the car, just the Mustang logo. The car is quite attractive by SUV standards, and the roofline is disguised using the body colour instead of black, giving it more of a coupé profile. There are many quirky touches, such as replacing the door handles with a digital button on the B-pillar that activates when the key is detected.

The Mach-E has a spacious, modern interior with an upright 16-inch touchscreen and a 10-inch digital screen in front of the driver, which helps keep the eyes on the road. Standard equipment is comprehensive and the large boot is supplemented with storage space in the front for the charging cable, for example. The model is nice to drive and handles well due to its convincing chassis, the ‘one-pedal’ driving mode is well calibrated, and the engine braking is very efficient. The claimed range is very good, especially for the extended-range rear-wheel-drive version, which manages 610km under the WLTP test cycle.

The Mustang Mach-E is not a cheap car, priced similarly to the Tesla Model 3, but has interesting positioning. It is larger and more powerful than offerings from volume manufacturers, such as the VW ID.4 and Skoda Enyaq, but at a higher price point, and is less expensive than similarly powered and sized premium models like the Jaguar I-Pace, Audi e-Tron and Mercedes-Benz EQC.

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

Upbeat outlook but not without challenges

1.63 million new cars hit UK roads in 2020 according to figures released by the Society of Motor Manufacturers and Traders (SMMT). With over 680,000 fewer cars registered, 2020 produced the lowest annual registration total since 1992.

The national lockdown between March 23^rd and June 1^st accounted for a significant proportion of the losses, with the market down over 615,000 units by the end of June. A further lockdown in England in November, together with enhanced restrictions periodically affecting the other three nations of the UK, added to an already challenging new car market. Dealers introduced ‘click and collect’ services part way through Lockdown-1, and enhanced online sales solutions enabled dealers to satisfy pent-up demand. These developments will already be paying dividends as the UK once again finds itself in a national lockdown, expected to last until the beginning of March at the earliest.

The wholesale used car market was somewhat subdued in December, with little evidence of a serious bounce-back following November’s lockdown. That was not surprising as December tends to be one of the weaker used car retail months, with Christmas shopping higher on the public’s priority list. The first-time conversion rate was slightly better than November’s at 72.4%, although that was almost 13 percentage points lower than December 2019.

As we look to the year ahead and consider what is in store for the new and used car markets, COVID-19 remains the biggest challenge. Thankfully, the UK Government achieved an 11^th hour Brexit trade deal, averting import tariffs, so that is one less problem for the new car market to contend with.

It is encouraging to see the rapid roll-out of COVID-19 vaccines, however, it is likely to be several months before the UK sees significant coverage, making further restrictions likely. The identification of a new, more easily transmissible variant of COVID-19 is a worrying development and has led to the latest national lockdown. This will undoubtedly affect new car registrations in at least January and February, and the impact will be considerable when compared to last year’s numbers, as the effects of COVID-19 did not impact that period. As we move through March and into the second quarter, which last year was badly affected due to Lockdown-1, registration totals should begin catching back lost ground and by year-end could reach around the 2 million mark.

The used car market should burst back into life once the Government gives a firm indication that the latest lockdown is to end. Until then, Glass’s expects continuing lack-lustre activity. Despite the challenges that lay ahead, the outlook for the used car market remains upbeat, with no crash in used car values expected.

Used-car markets and RVs under limited pressure in 2021

Senior data journalist Neil King explains Autovista Group’s key predictions for the year ahead, focusing on used-car demand and residual values in this second part.

Europe’s big five markets all suffered double-digit declines in new-car registrations in 2020, but used-car transactions exhibited more resilience. The exception is Italy, which suffered the same year-on-year in used-car transactions in Italy as new-car registrations, 27.9%, according to industry association ANFIA.

In contrast to the dramatic 29% decline in new-car registrations, used-car transactions in Spain declined by 12.8% in 2020, to 1,963,053 transactions, according to GANVAM, the Spanish dealers’ association.

‘The used-car market in Spain is always more favoured than the new-car market in times of crisis. Sales fell by only 13% in 2020, and the age structure of these sales has changed substantially in recent months and will continue to do so throughout 2021. The most notable change is undoubtedly the lower prevalence of young used cars in the market, caused by the standstill in tourism and the lack of renewal of rental fleets. In 2021, we also expect a greater share of electric vehicles in the used-car market, which accounted for just 0.2% of total sales in 2020,’ explained Azofra.

In the UK, used-car sales data are not yet available for full-year 2020, but the country’s used-car market contracted by 17.5% year-on-year in the first three quarters. Autovista Group estimates that used-car transactions were 15% lower in the year as a whole. This is only about half the contraction suffered by the new-car market. Used-car transactions are naturally expected to improve in 2021, but with a lower growth rate than new-car registrations.

Used-car transactions in France declined by a modest 3.8% in 2020, compared to a 25.5% fall in the new-car market, according to industry association CCFA. ‘The demand for diesel cars on the used-car market is still high while the supply is lower and lower, but petrol sales, which account for about 40% of total used-car sales, reached a maximum in 2020,’ explained Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux. Limited growth, if any, is therefore expected in 2021.

Slight improvement for Germany

Even in Germany, where the used-car market declined by only 2.4% in 2020, according to the KBA. Schwacke expects a slight improvement in used-car sales compared to 2020. ‘The used-car business was quite successful over the past 12 months under the circumstances and sold slightly more than seven million cars by the end of the year. The forecast for 2021 is the same – around seven million cars,’ commented Andreas Geilenbrügge, head of valuations and insights at Schwacke.

Europe: new-car registrations and used-car transactions, year-on-year % change, 2020

Source: CCFA, KBA, ANFIA, GANVAM, SMMT

(Note: UK is estimated, based on the latest data)

RVs grow in 2020, face limited pressure in 2021

Autovista Group’s COVID-19 tracker shows that the index of residual values (RVs) finished 2020 at or above pre-crisis levels in all of Europe’s major markets. The measurements began in February, with an index value of 100.

Source: Autovista Group, Residual Value Intelligence, COVID-19 tracker

Residual values have peaked, however, and have declined in recent weeks. Looking to 2021, ongoing COVID-19 restrictions and the economic impact, as well as the aversion to public transport, will support used-car demand. Autovista Group therefore predicts that residual values will only come under limited pressure.

Spain: difficult year

The tax rise in Spain, with the introduction of WLTP-based emissions figures, and the end to the RENOVE scrappage scheme will hinder new-car demand and means RVs may increase slightly in value terms in Spain, but a 1.1% decline is forecast in terms of trade percentage, i.e. value retention, in the standard 36-month/60,000km scenario.

‘We foresee a difficult year for the sector, especially in terms of new-car sales. However, used-car sales will resist the onslaught of the crisis better and only their average residual values will be slightly affected.’ Azofra emphasised.

‘Electric vehicles will experience greater pressure on their transaction prices in the used-car market. On the one hand, their price is still very high, which is an important market barrier, even more so in crisis circumstances such as the present. On the other hand, demand is trying to be stimulated through incentive schemes, so it will be difficult to maintain their used-car price. In addition, the recharging infrastructure is still insufficient, the poorest in the big five European countries, which reduces their development space in the used-car market. With regard to the rest of the engines, we estimate small negative adjustments in petrol and diesel vehicles and greater stability for hybrid engines, which are in increasing demand.’

The end to Brexit uncertainty could serve as a positive for the UK’s new-car market, but deliveries may be affected and price rises are expected as the share of components in some engines will invariably exceed the ‘locally-sourced’ threshold. It is an incredibly difficult call but Glass’s, the UK arm of Autovista Group, forecasts a 1.4% decline in the RVs, in trade percentage terms.

Schwacke points out that fleet registrations from 2017/2018 declined somewhat in Germany and there were also almost 400,000 tactical registrations less from 2020, of which usually two thirds are sold to end customers as young used vehicles in the year after first registration.

Stable demand

‘In view of the expected stable demand, this is definitely a plus point for price development in the coming year, but supply volume will probably struggle,’ said Geilenbrügge. The return to a 19% VAT rate on new cars will also affect RVs, but a modest decline of 0.7%, in trade percentage terms, is forecast for used cars in the 36-month/60,000km scenario.

The tax changes in France, which penalise petrol cars more than diesels, and incentives for EVs present a mixed picture. ‘In 2021, there is a clear risk of having a new-car market in contradiction with the used-car market. For CO2 reasons, the fuel types that are driving the new-car market are not the most attractive ones on the used-car market. Lower supply will reduce the RV pressure on petrol cars, and the sales stop of powerful diesel engines, which are well demanded on the used-car market will especially support RVs of these specific vehicles. The high prices and bonus for EVs still impacts RVs, especially at 12 months, but the €1,000€ bonus reduction in July 2021 will support RVs more positively,’ explained Taitz. Overall, the latest RV outlook for France calls for a minimal drop of 0.4% in the prices, in trade percentage terms, of used cars.

The poorest RV outlook is in Italy, where used cars have not weathered the COVID-19 storm better than new cars and the introduction of additional incentives for new cars will apply more pressure on used-car demand and residual values. RVs of used cars in the 36-month/60,000km scenario are currently forecast to fall by 3.9% in trade percentage terms.

In a first part, King discussed Autovista Group’s predictions for new-car registrations in Europe’s major markets in 2021.

COVID-19 and other market factors breed caution for 2021

Europe’s big five markets all suffered double-digit declines in new-car registrations in 2020 and the magnitude of the recovery in 2021 fundamentally depends on the duration and severity of restrictions to tackle COVID-19 and the accompanying economic impact. Automotive-specific factors will also determine the extent to which markets bounce back in 2021. Senior data journalist Neil King explains Autovista Group’s key predictions for the year ahead, focusing on new-car registrations in this first part.

Despite the new-car market stability in December, Spain still contracted more than the other major European markets in 2020. This does not automatically mean it will enjoy the highest level of growth in 2021. The end of the RENOVE scrappage scheme on 31 December 2020 and higher, WLTP-based registration taxes from 1 January 2021 pulled demand forward into 2020. Furthermore, with no improvement in Spain’s crucial tourism sector, and therefore the wider economy, envisaged in the near future, new-car registrations in Spain are expected to recover at a slower rate than in the leading European markets, except Germany.

‘A very tough first half of the year is expected, and a start to the recovery in the second half of the year. In any case, the recovery will be slow, and we do not expect new-car volumes to reach figures similar to those of 2019 for at least three years,’ commented Ana Azofra, valuations and insights manager at Autovista Group in Spain.

The recovery in Germany is forecast to be rather limited, not only because it starts from the highest base, declining by only 19% in 2020, but also as new-car demand will be slightly hampered by the return to a VAT rate of 19%, up from the reduced rate of 16% that was in effect from 1 July to 3 December 2020. The smaller quantities of newly launched high-volume vehicles in 2021, and the reduction in the range of products due to the threat of CO2 fines, will also have an impact. However, regained production capacity, as well as the significantly lower availability of very young used cars, should act as positive effects. Autovista Group’s Schwacke is cautiously optimistic for 2021 and forecasts a recovery to just under 3.1 million units, equating to growth of 6%.

New-car registrations, major European markets, year-on-year % change, 2020

Source: CCFA, KBA, ANFIA, ANFAC, SMMT

Post-Brexit Britain, incentivised Italy

The declines in new-car registrations in Italy and the UK in 2020, were 27.9% and 29.4% respectively. However, new-purchase incentives introduced in Italy and the end to Brexit uncertainty in the UK, which compounded the effects of COVID-19, will provide a positive impetus to demand in 2021.

Autovista Group’s latest base-case forecast predicts a 25% improvement in UK new-car registrations in 2021, to just over two million units. However, this is predicated upon vehicle deliveries being largely unimpaired by post-Brexit disruption after any short-term teething problems, and the car market being able to recover from the current lockdown, together with any further restrictions that may be imposed later in the year.

‘Import delays at the port of entry will reduce UK registrations in Q1 and Q2 2021 and manufacturers are still not producing cars at full capacity due to COVID-19. The UK is also in lockdown but click-and-collect will help some car registrations, with the November 2020 volumes highlighting the need retail customers still have to kick tyres,’ said Anthony Machin, head of content and product at Glass’s.

The recovery is not expected to be as pronounced in Italy, but the new incentives will certainly help to drive the recovery.

Fuelling France

The French new-car market contracted slightly less than Italy and the UK in 2020, by 25.5%. In addition to the COVID-19 effect, the market was impacted by tax changes that were introduced in March 2020 and especially penalise petrol cars. These negative influences should dissipate during 2021 but the reduction in incentives for electrically-chargeable vehicles (EV) and the threshold for the environmental ‘malus’ (penalty), along with a higher penalty ceiling, will suppress demand.

‘Despite a more favourable malus scheme for diesel cars on the new-car market, I do not expect a diesel sales increase in 2021 and I expect lower petrol sales. However, OEMs are pushing battery-electric vehicles (BEVs) on the new-car market for CO2 reasons and the number of plug-in hybrids (PHEVs) increased a lot in 2020, a rise that will continue in 2021. Hybrids also offer a real alternative to petrol cars as they are cheaper than PHEVs, the electricity usage is simpler and, in terms of taxation, they offer the same benefits,’ explained Yoann Taitz, Autovista Group head of valuations and insights, France and Benelux.

In a follow-up article, King will discuss Autovista Group’s predictions for used-car demand and residual values in Europe’s major markets in 2021.

New Light Commercial Vehicle (LCV) Market December 2020

December is recognised as a quieter registration month, but with delayed pipeline orders now being delivered, the month proved stronger than expected. Registration data from the SMMT indicates the LCV market declined just 1% in December. The 27,283 vehicles registered brought the total year-end volume for 2020 up to 292,657 units compared to 365,778 units in 2019, a deficit of 20%. However, this result did allow LCV registrations for 2020 to exceed the quarter four SMMT forecast of 288,000 units.

In what has been an extraordinary and testing year for the commercial vehicle sector, with the backdrop of countrywide lockdowns, social distancing measures, redundancies, Brexit and the year-long concern of looming no-deal vehicle tariffs has all affected LCV demand during 2020.

Annual new LCV registrations 2016-2019 graph

The December segment breakdown reveals a 7.3% registration increase in vans between 2.5-3.5 tonnes sector was the only bright light. Registrations for vans under 2.0 tonnes and vans between 2.0-2.5 tonnes declined by 17.7% and 2.6% respectively. Unsettling times for the Pickup sector continue, with December registrations declining a further 29.9%. Pickup registrations for the full year were 35,691 units, down 32.7% on the 53,055 total in 2019.

Top five LCV registrations

Top LCV registrations table December 2020

Throughout 2020 the pandemic affected the whole UK economy and will continue to do so into 2021. Although a Brexit deal with Europe is now agreed, clarity over UK-EU trading relations coupled to the rollout of vaccinations is paramount to driving recovery and offering hope to both the van industry and the economy as a whole.

December Used Light Commercial Vehicle (LCV) Overview

The first half of December remained busy with auction houses confirming high levels of online sale activity with healthy conversion rates. In the run-up towards Christmas, the number of sales reduced but performance remained strong. Prices held steady in the majority of sectors with high bids continuing for retail-ready stock in the busy home delivery run-up to Christmas.

Some dealers took this as an opportunity to stock up on additional vehicles ahead of a possible shortage of quality stock, driven by adverse effects on the supply chain due to further lockdowns and the implications of a Brexit ‘no deal’.

Although sales at auction in December decreased compared to December 2019, conversion rates over the period increased by 3.9%. At the same time, Euro 5 stock made up over 60% of sales, highlighting the shortage of quality later year stock in the marketplace.

As we move through another period of lockdown, the outlook suggests further stock shortages through the first quarter of 2021. Demand for home delivery shows little sign of abating and as a result, prices in most sectors look set to remain high.

December in detail

Glass’s auction data shows the overall number of LCV sales in December declined by 33.3% versus November 2020 and by 4.6% over the past twelve months. First-time conversions decreased 1.8% on the previous month, with the 4×4 sector again most heavily affected.

December also saw average sales prices increase by 5.2% versus November and were 11% higher than the same point last year – the third highest in the last twelve months. The average age of sold stock decreased from 73.5 months in November to 72 months in December and was 2.1 months younger than the same point last year.

In line with sales of younger vehicles, average mileages also decreased from 78,205 miles in November to 78,005 miles in December. However, December’s average mileage is 560 miles higher 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.

New Car Market Update December 2020

New car registrations fell by 10.9% in December 2020, according to figures released by the Society of Motor Manufacturers and Traders (SMMT), marking the eleventh monthly deficit compared to 2019. The full-year total was 29.4% lower than 2019 at 1.63 million cars, due to challenging market conditions brought about by the UK’s battle with COVID-19.

Total new car registrations monthly graph December 2020

The fleet market fared slightly better than retail in December, recording an 8.3% drop in registrations, whereas private retail fell by 13.9%. However, full-year results show that whilst fleet registrations accounted for the lion’s share at 52.1% of the market, compared to 2019 they were over 31% lower. Private retail gained 1.7% market share but registrations fell by 26.6%, underlining the effect that COVID-19 has had on the new car market throughout 2020.

Despite the challenges thrown at the new car market, there remained some positivity, with alternative fuel vehicles (AFVs) continuing to grow. In December alone, almost 22,000 battery electric vehicles (BEVs) were registered with December’s top-selling car the Tesla Model 3, pushing Volkswagen’s Golf and Ford’s Fiesta into second and third places respectively.

Self-charging hybrids maintained the biggest share of the full-year AFV pot, growing by 12.1% to just over 110,000 units, with plug-in hybrids growing 91.2% to almost 67,000. However, the biggest turnaround has been in BEVs, which grew by 185.9% to 108,205 units, helped by increased demand from the fleet sector due to very attractive benefit in kind tax rates for company car users.

Petrol and petrol mild-hybrid remain the most popular fuel type, but understandably suffered falling volumes of nearly 33%. Although the bulk of the fall is attributable to COVID-19, its market share has fallen as AFVs continue to grow. Diesel and diesel mild-hybrid volume almost halved to 322,715 cars, which is only 13.1% ahead of AFV registrations.

Looking ahead to the first quarter of 2021, the new car market faces challenges. A national lockdown instigated in response to spiking COVID-19 cases and the identification of a new, more transmissible disease variant began on January 5^th. This will certainly hamper new car sales. Whilst ‘click and collect’ services should help, demand will be subdued badly affecting registration activity. Should ‘Lockdown-3’ end at the beginning of March as has been intimated, we should expect a bounce-back with registrations recovering throughout quarter two.

Five automotive tech advances to look forward to in 2021

The Christmas and New Year season was very different this year. , the low-key break left more time to reflect on the past 12 months that have rushed by and what new technologies 2021 might bring the automotive industry, observes Autovista Group’s chief economist Dr Christof Engelskirchen. Let’s keep fingers crossed that by the summer, we will be in a position to enjoy 2021 even more.

1. AWD in BEVS

It is surprising how few of the available battery-electric vehicles (BEV) feature all-wheel drive (AWD), when you consider how much easier it would be to deploy this technology compared to an internal combustion engine (ICE) and even a plug-in-hybrid electric vehicle (PHEV). One electric engine at each of the four wheels seals the deal. It would represent a unique selling point in several segments, and could be leveraged as an argument towards stronger safety, sportiness and versatility. Currently, you would need to spend (far) beyond €50,000 to get your hands on an AWD BEV and your choice would be limited to: Audi E-tron, E-tron Sportback, Jaguar I-Pace, Mercedes EQC, Porsche Taycan, Tesla Model S, Model X, Model 3 and Volvo XC40 recharge pure electric. That will change this year with the Skoda Enyaq, Ford Mustang Mach-E and Polestar 2 hitting the stage and a wave of AWD BEV-launches from Audi, Mercedes and Hyundai. Although it might be 2022 until you will get your hands on your preferred model.

2. Increased BEV ranges

I vividly remember 2009 when we were bombarded with arguments that the vast majority of daily trips can easily be done with a BEV and that we need to educate people about this to address the concerns around range anxiety. There is a good summary of research on the topic of average length of daily trips for various regions in Europe and by type of fleet (see table below).

Fleet shares per intervals of daily travelled distances

Source: Elsevier, ScienceDirect.com – Case Studies on Transport Policy 6 (2018)

Nevertheless, range anxiety continues to represent an issue for a majority of people not wanting to give up the greater than 500km and more range that comes with every ICE car. People underestimated the importance of offering flexibility and a variety of applications, when consumers choose an appropriate vehicle. For example, SUVs consume more fuel/energy due to their body style than a saloon, estate or hatchback. Yet, people buy an SUV as they overcompensate that fact with versatility: they are considered stylish, offer higher seating position, increase perceived safety and they work in an elegant setting as well as at the home improvement retailer or garden centre.

3. Touchscreen only

Admittedly, I was not the first to jump on board the iPhone train as they became popular. Writing an email on a touchscreen was a big nuisance for me. Thankfully, the wide variety of use cases and innovations that a screen, in combination with an Android or iOS operating systems, more than compensated for this. The touchscreen-only devices are at a point of no return. However, there is a notably significant level of safety concern when operating a touchscreen while driving a vehicle. It is also not so easy to hit the right button when you get no tactile feedback. Nevertheless, the transition to touchscreen only, with some buttons remaining on the steering wheel and a turning wheel to hold onto, are unlikely to be reversed. Most recent user interfaces allow for natural-voice command recognition, which will help pave the way for the touchscreen-only car in 2021. One of the more recent announcements around touchscreen technology is the MBUX Hyperscreen from Daimler, announced on 7 January and showcased at the Consumer Electronics Show (CES) this year.

4. Fully online-enabled car purchase

When I did all my Christmas shopping online this year, comparing prices and features across multiple sites, I remembered how different the car-buying experience was when we looked for a car privately two years ago. We needed to sell our used car and tried to cross-shop for the right full-service leasing offer for a second vehicle in the household. It involved a fair amount of physical presence at dealerships and applying unnerving haggling techniques, knowing the professional on the other side felt as equally annoyed as we did. Would it not be nice to take all of this out of the equation? 2021 is the chance and we are up for a new leasing contract towards the end of the year. I am looking forward to a more user-friendly and online-enabled shopping experience.

5. Flexible-ownership models

A more digitally enabled sales-and-marketing value chain, along with customer openness to shopping online, has invited new formats, brands and players to the market. ONTO, for example is a car-subscription provider for electric vehicles. PIVOTAL is Jaguar Land Rover’s car subscription brand. Volvo offers Volvo Care as a car-subscription business model and Lynk & Co wants to offer vehicle access through a monthly-membership fee-based model. I could mention many more OEMs that are very active in this area as well as start-ups, leasing and rental companies that offer more flexible-ownership models. What they have in common is that they will produce more younger, higher-value used cars than ever before. We expect that the number of young used-car transactions will rise by 55% between 2019 and 2030.

Brexit deal introduces threshold to sourcing BEV components, or tariffs to apply

The Brexit deal has offered some relief to UK manufacturers of electrically-chargeable vehicles (EVs) following earlier reports that tariffs would be applied to exported vehicles that do not contain a certain quota of ‘locally-sourced’ components.

During negotiations, issues surrounding the number of components used in vehicles from outside Europe came to light. This problem especially affected EVs, where all pieces of the battery count as components and many of which are sourced from Asia.

Without a certain number of locally-sourced parts, vehicles would be subject to tariffs under World Trade Organisation rules, meaning EVs could see an additional 10% added to UK exports to the continent. For the purposes of any deal, locally sourced would mean components produced within the European Union and/or the UK.

In October 2020, this issue was reported as a sticking point in negotiations, with components from Japan and Turkey highlighted as being unable to count as locally sourced, despite the UK negotiating free-trade agreements with both countries. Manufacturers with plants based in the UK and the EU will need to prove that exported goods are European-made, with a specified threshold of parts, a move known as ‘cumulation’.

Battery threshold

The Brexit trade deal offers carmakers a slender lifeline, with a staggered transition period of three and six years. In this time, the number of locally-sourced components must increase; otherwise, tariffs will be introduced, in spite of a free-trade agreement.

Up until 31 December 2023, Annex Orig-2B: Transitional product-specific rules for electric accumulators and electrified vehicles, states that accumulators and battery cells must either be produced in the EU or comprise no more than 70% non-EU components before tariffs are introduced. Hybrid, plug-in hybrid (PHEV) and battery-electric vehicles (BEVs) can comprise no more than 60% non-EU or UK components.

However, following this period, a further stage has been included, whereby the threshold of non-local parts drops, with accumulators only allowed to feature a maximum 40% foreign components, battery cells 50% and hybrids, PHEVs and BEVs a limit of 55%, until 31 December 2026.

The rules for 2027 and beyond will be reviewed later, but not before 2025 after the first transition period has passed.

‘The review shall be done on the basis of available information about the markets within the parties, such as the availability of sufficient and suitable originating materials, the balance between supply and demand and other relevant information,’ the document states.

Sourcing components

The parts requirement could have a significant impact on automotive manufacturing in the UK, particularly in terms of where components are sourced. Currently, Toyota builds hybrid models in the country, while Nissan produces its BEV Leaf model for export to Europe. Other carmakers are also developing their UK lines for electrification, with BMW preparing to build the Mini Electric, and Jaguar Land Rover retooling their plants for upcoming models.

The terms of the deal mean that carmakers must find as many locally-sourced components as possible for EVs and hybrids to be built in the UK. Failure to adhere to the thresholds as laid out in the UK-EU deal will mean vehicles built in Britain will have a 10% tariff added when they are shipped. This will likely make them uncompetitive on the European market, impacting sales as a result.

The automotive industry is increasingly moving away from internal combustion engines (ICE) as CO2 targets mean zero-emission technology is the only way to meet mandates. Yet the supply of crucial components related to the battery and motors is dominated by companies and plants based in Asia, which do not count as locally sourced.

There is, however, an increasing drive for battery manufacturing in Europe, with several companies announcing the building of gigafactories on the continent. There is also a project to develop batteries in the UK, adding to the available local components’ roster. Many of these aim to be fully up and running by the middle of the decade, with production starting slowly in the next couple of years. This could represent a realistic opportunity of meeting both threshold targets.

Free trade

However, the complexities of trade agreements could also prove difficult to UK vehicle manufacturing. Japanese newspaper Nikkei reported that Nissan had chosen not to produce its upcoming electric Ariya SUV at its Sunderland plant, which is already tooled for production thanks to its manufacturing of the Leaf. Instead, the company will produce the vehicle in Japan and take advantage of free-trade deals with the EU and the UK to export the vehicle to these markets. However, Nissan has stated that it had no plans to produce the Ariya in the UK at all, according to Automotive News Europe.

These trade agreements could see other EV developments pulled out of the UK, while some European-based manufacturers may already be considering moving production of PHEVs and BEVs out of the country in case they cannot meet the first threshold deadline in 2024.

German new-car registrations down 19% in 2020

Germany saw the registration of 2.9 million new cars in 2020, down 19.1% on 2019. The latest figures from the Kraftfahrt-Bundesamt (KBA) show that 62.8% of these units were registered for commercial purposes, down 22.4%, while 37.1% of the market share was private, down 13%.

Bidding farewell to a year of unprecedented challenges, the German market was able to end 2020 on a marginally positive note. A total of 311,394 passenger cars were sold in December last year, up 9.9% on the same period from 2019. Accompanied by an 8.4% rise in September, the German new-car market only saw two months of registration growth in 2020. These upticks in the second half of last year represent a move away from the 61% plunge in April and 49.5% drop in May.

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

Data: KBA

While Germany appears to be leading the way with a recovering automotive market, difficulties continue across Europe as member states are battered by fresh pandemic waves. In December last year, French new-car registrations dropped by 11.8% compared to the same period in 2019. Italy felt a greater decline at 14.9%, while Spain saw just 13 fewer registered units than December 2019. However, Germany does not appear to be out of the woods yet.

Climbing infection rates have triggered an extension of the country’s lockdown measures until the end of January. This makes a positive start to this year seem even less likely as dealerships must remain closed, except for the service departments. While Autovista Group’s Schwacke expects to see a recovery to just under 3.1 million new-car registrations in 2021, it predicts figures will be below those in previous years, and significantly below 2019’s peak.

New-car registrations, EU4, y-o-y % change, January to December 2020

Automotive sales recovery tracker full year Europe 2020

Data: CCFA, KBA, ANFIA, ANFAC

Drives and segments

With the largest share of last year’s market at 46.7%, a total of 1,361,723 petrol-powered cars were registered, down 36.3% on 2019. Meanwhile, 819,896 diesel-driven cars took a 28.1% share, down 28.9% on the previous year.

Alternative drives, consisting of hybrids, battery-electric vehicles (BEVs), hydrogen fuel-cell and gas claimed approximately a quarter of all new-car registrations in Germany last year. Hybrids achieved a share of 18.1%, up 120.6% on the previous period with 527,864 registrations, including plug-in hybrids (PHEVs) with 200,469 units, up 342.1% and with a market share of 6.9%. Electric cars represented 6.7% of the market, up 206.8% to 194,163 units. A total of 7,159 gas-powered cars were registered in 2020, down 6.1% on 2019, and LPG-driven cars saw a drop of 9.8%, to 6,543 units. CO2 emissions from cars fell by 11.0% last year, on average to 139.8g/km from 157.0g/km in the previous reporting period.

Over half of all registrations were accounted for by SUVs (21.3%), compact cars (20.5%) or small cars (15.1%). With 2.6% of the market, motorhomes saw the most significant increase, up 41.4%.

Brand performance

All German brands showed a decline last year. Smart took the hardest fall at 67.3%, followed by Opel, which dropped by 32.3%, then Ford down 30.6%. VW fell by 21.3% on the previous reporting year, Audi slumped by 19.9%, Porsche was down by 16.3%, BMW dropped by 13.7%. Negative results were also reported by Mini (down 11.7%) and Mercedes (down 10.6%). With a share of 18%, VW held the largest share of the new-car market in 2020.

For imported brands, both Tesla (up 55.9%) and Fiat (up 0.2%) reported positive results for 2020. Meanwhile, declines were recorded by Suzuki (down 44.8%), Ssangyoung (down 40.2%), Mazda (down 38.1%) and Dacia (down 36.6%). Skoda led the imported brands with a market share of 6.2%, followed by Renault with 4.3%.

The Van’s Headlights: The Ford Ranger Wildtrak

The Van’s Headlights

Despite increased competition over the last few years, sales of Pick-ups have grown consistently since 2012, with over 50,000 UK registrations each year over the last three years. One consistent performer over this time is the Ford Ranger. The pick-up of choice for many, sales of the Ranger since 2016 have equated to nearly 30% of all pick-up sales in the UK during this time.

Even with a reduction in the number of players in the Pick-up sector over the last 12-18 months and the ravaging effects of the COVID-19 pandemic on the industry, Ford continues to outsell the competition. Although overall sales are down twenty thousand to the end of November 2020, the Ford Ranger remains as popular as ever. Nearly 11,700 units have been registered in that period, amounting to 35.3% of the overall pick up sector total. In this month’s edition of The Van’s Headlights, the team consider the merits of the best-selling pick-up in the UK, the Ford Ranger (1998–).

The Ford Ranger Wildtrak

In the USA, the history of the Ranger name started decades before it was used on a pick-up truck. In 1958 Ford had experimented with the name on the Edsel Ranger sedan. This was followed in 1967 with the launch of the fifth-generation F-Series pick-up. The top of the line trim for the F-100 and F-250 was called the Ranger. In 1970, a higher specification Ranger XLT was added to the range.

By the early 1980s, a bigger F-150 had been introduced, taking most of the sales from the F-100. Ford recognised that there was a gap in the market for a smaller pick-up. Already in their line up, but built by Mazda, was the Ford Courier pick-up.

In 1982, Ford of America axed the F-100 and the Courier pick-up and ushered in its first compact pick-up, the Ranger. Continuing to be produced by Mazda, the first generation Ranger offered two trim levels, the XLT and the Lariat selling over 250,000 units in 1985 alone.

The second-generation Ranger was launched in 1993 with a major redesign. The grille size was reduced substantially, creating a smoother, more aerodynamic face, whilst flared wheel arches created a more rounded look. In 1994, the Mazda produced Ranger was replaced by a Ford produced Ranger and rebadged as a Mazda B-Series for far-eastern markets. In 1998, an electric Ranger was added to the range for the US market. It had a range of 65 miles and a top speed of 65mph. Up to 400 of them still exist today.

1998 saw the launch of the third-generation Ranger pick-up in the US. An extended Super Cab featuring a second row of ‘jump seats’ in the rear was a design unique to the Ranger, whilst an additional XL trim level was added. However, the compact pick-up market was under pressure from the bigger full-size pick-ups. Sales were declining and by 2008 were barely reaching six figures. Ford decided to pull the plug on the Ranger just four years later with sales at an all-time low of just 19,000.

Ford was not done with the Ranger though. It had noticed how big the compact pick-up market had become in other world markets and how well the rebadged Mazda B-Series had performed against competition from Toyota, Mitsubishi and Isuzu in particular.

International markets

During 1998, Ford launched the Ranger name on the international market, rebadging the Mazda B-Series until 2006. Launched with 4×2 and 4×4 configurations, Regular, Extended Super Cab and Double Cab variants and several trim levels, the Ranger was well placed to compete. The higher specification Wildtrak trim level was introduced to the UK line-up in September 2005.

The second-generation international Ranger was produced between 2006 and 2011, this time derived from the Mazda BT-50 pick-up which replaced the B-Series.

The partnership with Mazda ended in 2011 with Ford producing the third-generation Ranger independently. Designed by Ford Australia, the Ranger was sold across five continents and 180 markets with 4×2 and 4×4 drivetrains and up to five trim levels. New styling saw a move towards the leisure utility market. The same off-road ruggedness was linked to curvier, more aerodynamic lines typically associated with an SUV. A 2.2TDCi engine with outputs of 125PS or 150PS and a 3.2TDCi 200PS unit powered the Ranger, with the latter mated to a 5-speed manual or 6-speed automatic transmission.

The Ranger was given a major facelift in 2015, receiving enhancements including revised engines and a more muscular look that included a new grille, slimmer headlights, new bumpers and revised headlights. More equipment including DAB radio featured as well. SYNC2 connectivity became standard on the Limited and Wildtrak models, whilst options included lane-keeping alert for the first time. At this time, the 2.2TDCi 125PS and 150PS outputs were dropped in favour of more powerful 130PS and 160PS units. Euro 6 compliant variants were introduced in 2017.

The third-generation Ranger launched in the summer of 2019 with a raft of improvements. Featuring an all-new set of 2.0-litre EcoBlue diesel engines offering 130PS, 170PS and 213PS and new 6-speed manual or 10-speed automatic transmissions. The new UK version includes a revised front bumper and all-new grille, new exterior colours and premium LED headlamps on higher series versions and an all-new top-of-the-range Raptor model.

At the same time, following huge increases in US compact/mid-sized pick-up sales, Ford also re-launched the Ranger back in to the American market.

The all-new Ranger due for launch in 2022 will be developed by Ford Australia and manufactured at the Ford Silverton factory in South Africa. It will be a collaboration with Volkswagen who will rebadge the pick-up as the Amarok.

Something for everyone

Andy Picton, Glass’s Chief Commercial Vehicle Editor recommends the Ford Ranger as “a long-established pick-up that has been the preferred choice by operators for many years. The Ranger offers something for everyone, with workhorse and lifestyle users equally catered for.”

Andy added, “With its impressive working credentials, towing capabilities and extensive specification list, it’s easy to see why the Ranger is so popular. Equally capable on-road or off, the Ranger is reliable, tough and attractive and benefits from the support of Ford’s strong Transit Centre dealer network”.

The Ford Ranger Pick-up range

Euro 6d-Temp Diesel engines
4×2 and 4×4 drivetrains
Manual and automatic transmissions
Body styles
– Regular Cab
– Extended Super Cab
– Double Cab
Six trim levels
– XL
– XLT
– Limited
– Wildtrak
– Thunder
– Raptor

Ford Ranger Wildtrak 4×4 3.2TDCi 200PS Auto D/Cab Pick-up (2016-2019)

Ford Ranger Wildtrak 4x4 3.2TDCi 200PS Pick-up (2016-2019) interior

Standard specification on the Ranger 4×4 XL 2.2TDCi 160PS double cab included DAB radio with USB, AUX and Bluetooth, body-coloured front bumpers, electrically operated and heated wing mirrors, electric front windows, Ford Easy-Fuel capless refuelling system, Electronic Stability Control (ESC), drivers airbag and 16-inch steel wheels.

Additionally, the recommended 2018 Ranger Wildtrak 4×4 3.2TDCi 200PS Double cabadded a plethora of additional equipment as standard. This included; a choice of either manual or automatic transmission, 18-inch machined alloy wheels, bed liner, moulded side steps, aerodynamic sports bar, power-folding heated door mirrors with puddle lights, rear parking sensors and 12v power socket in the load area.

A liquid metallic grey finish featured for the new trapezoidal grille, side mirrors, door handles, side air vents, load-bed rails and tail lamps, exclusive rectangular fog lamps, and bold Wildtrak graphics that stand out against the new signature exterior metallic Pride Orange finish. Inside, the premium design continued with exclusive heated black and orange sport seats incorporating an eight-way power-adjustable driver’s seat, dual colour digital displays, 8-inch touchscreen, chrome effect air-vent rings, DAB radio/CD/SD-Nav system with 8” TFT touchscreen, Ford SYNC2 with voice control, USB and Bluetooth, steering wheel-mounted controls, cruise control, Dual-Zone Electronic Automatic Temp Control (DEATC), rear privacy glass, soft-touch instrument panel top with orange accent stitching and ambient interior lighting.

Ford Ranger Wildtrak Auto vehicle details table

2018 Pros	2018 Cons
Comfortable drive	Not the ‘greenest’ pick-up
Good level of specification and safety aids	3yr/60k warranty shortest in sector
5-star SCAP crash rated	The six-speed automatic is a little sluggish
Can tow uo to 3,500kg	Uncomfortable offset pedals on the manual
Comprehensive model line-up	Engine is noisy
Plenty of low down pulling power	Fuel economy not the best in sector
Benefits from dedicated Transit Centre dealer network

Glass’s recommendation

Ford Ranger Wildtrak 4×4 3.2TDCi 200PS Auto D/Cab Pick-Up
Registration Plate: 2018/68
Mileage: 30,000 miles
Glass’s Trade £19,550 Excl VAT
Glass’s Retail £22,800 Excl VAT

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