Fuel Type: Hybrid (HEV)

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.

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.

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

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.   

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

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

Daimler is to undergo a fundamental change in its structure, spinning off its trucks business and renaming itself Mercedes-Benz. The move is intended to help the company unlock the full potential of its business in a zero-emission future.

Daimler Truck will become a listed company with a majority stake distributed to Daimler shareholders. Mercedes-Benz will continue to develop models for both the passenger car and van markets. Diverging the business will allow each unit to focus on new technologies that are impacting their respective sectors.

Signs of a shift in policy emerged last year when Daimler announced it was developing hydrogen systems for its trucks business while cancelling plans for fuel-cell-powered cars. As the commercial and car markets are likely to take different paths towards zero-emissions, each company will now be able to put funding and resources into its own development rather than share the pot and restrict development as a result. The split is expected to occur at the end of this year, with an extra-ordinary shareholder meeting in Q3 to discuss the final plans and obtain approval.

Corporate structure

‘This is a historic moment for Daimler. It represents the start of a profound reshaping of the company. Mercedes-Benz Cars & Vans and Daimler Trucks & Buses are different businesses with specific customer groups, technology paths and capital needs.’ said Ola Källenius, chairman of the board of management of Daimler and Mercedes-Benz.

‘Both companies operate in industries that are facing major technological and structural changes. Given this context, we believe they will be able to operate most effectively as independent entities, equipped with strong net liquidity and free from the constraints of a conglomerate structure,’ he added.

As part of a more focused corporate structure, both Mercedes-Benz and Daimler Truck will be supported by dedicated captive financial and mobility service entities. The company plans to assign resources and teams from its current Daimler Mobility business to both brands.

‘We have confidence in the financial and operational strength of our two vehicle divisions. And we are convinced that independent management and governance will allow them to operate even faster, invest more ambitiously, target growth and cooperation, and thus be significantly more agile and competitive,’ commented Källenius.

Sustainability needs

Daimler had been struggling in recent years, announcing a series of profit warnings and initially struggling with its CO2 targets following the introduction of the Worldwide Harmonised Light-Vehicle Test Procedure (WLTP). Last year, the company managed to turn things around, tripling sales of plug-in hybrid (PHEV) and battery-electric (BEV) vehicles, and forecasting that it met its emissions figures to avoid any EU-sanctioned penalties.

‘We will continue to push forward with our ’Electric first’ strategy and the further expansion of our electric model initiative. Based on our current knowledge, we expect to meet the CO2 targets in Europe again in 2021,’ said Källenius.

With separate CO2 targets for passenger cars and trucks, Daimler will be keen to keep up this momentum, especially with stricter EU regulations for 2025 and 2030. Therefore, separating its trucks business will give Mercedes-Benz more focus on ensuring it meets guidelines by focusing on its electrification plans.

Further strategy

In October, Daimler unveiled a raft of plans that would see Mercedes-Benz focus on the luxury market with a shift to electrically-chargeable vehicles (EVs). The company plans for the number of internal combustion engine (ICE) models it offers to drop 70% by 2030. Part of this plan could see its range of compact models decrease as it focuses its product portfolio on the most profitable parts of the market.

‘We intend to build the world’s most desirable cars,’ said Källenius at the time. ‘It is about leveraging our strengths as a luxury brand to grow economic value and enhancing the mix and positioning of our product portfolio. We will unlock the full potential of our unique sub-brands – AMG, Maybach, G and EQ. Our strategy is designed to avoid non-core activities to focus on winning where it matters: dedicated electric vehicles and proprietary car software. We will take action on structural costs, target strong and sustained profitability.’

By divesting itself of Daimler Trucks, the carmaker can now focus on expanding new technologies in the passenger car market, including expanding its EQ line-up of BEVs. It plans to increase its range in the shortest space of time, meaning product development resources and expertise will be shifted to electric-drive projects.

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.

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.

Used car retail market observations December 2020
Average sale price graph December 2020

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.

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 5th. 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.

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

Germany New car YOY


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%.

Alternative drives made up a quarter of German registrations in 2020

Alternative drives, consisting of hybrid, fuel-cell, gas, hydrogen, and battery-electric vehicles (BEVs), claimed approximately a quarter of all new-car registrations in Germany in 2020. This result came in a year defined by COVID-19, when registrations in the country declined by roughly 20%.

The country’s government sought to use the pandemic as a springboard for a greener economy, with a greater emphasis on electromobility. In November last year, it committed a €4 billion stimulus package to the automotive sector, with funds being channelled into the adaptation of production lines and incentivising the purchase of electrically-chargeable vehicles (EVs).

An electric transformation

With the Kraftfahrt-Bundesamt (KBA) reporting the number of newly-registered BEVs increased by 206% in 2020, compared with 2019, the German automotive market does look to be on track for an electric transformation. Some 13.5% of all newly-registered passenger cars in the country now sport an electrified drivetrain, from BEVs to plug-in electric hybrids (PHEVs) and fuel-cell electric vehicles (FCEVs). The federal states of Schleswig-Holstein, Berlin and Baden-Württemberg played host to a high share of these new EV registrations last year, at over 16%.

‘E-mobility is now at the heart of mobile society. Positive user experiences, reliable technologies and a growing range of products facilitate the switch to e-mobility. With a sustained trend for registrations of vehicles with electric powertrains, around 22% in the last quarter of 2020, the government target of seven to 10 million electric vehicles registered in Germany by the year 2030 can be achieved,’ said KBA President Damm.

Segments and brands

The small-car segment was the strongest, accounting for 29.9% of registrations of new BEVs in 2020. Meanwhile, SUVs made up just under a fifth of the registration volume of new BEVs. The compact segment also reached a high share of this type, with 19.6%.

For BEVs, private registrations made up almost half of all registrations, at 48.8%. For all alternative powertrains, two-thirds were commercial (63.5%), and one third (35.4%) were private. Overall, some 63% of all new-car registrations, including petrol and diesel, were registered for commercial use in 2020. 

A total of 394,940 new EVs were registered last year. VW passenger cars claimed the highest market share at 17.4%, up 608.6% compared with 2019. Meanwhile, Mercedes enjoyed a 14.9% share, up 499.8%, and Audi took 9%, up 607.9%. A total of 194,163 new BEVs were registered in the country in 2020. The VW brand claimed a 23.8% share of this volume, representing a 463.3% increase on the previous year. Renault then followed with a share of 16.2%, up 233.8%, and Tesla captured 8.6%, up 55.9%.

VW achieved the largest share of the EV parc, with 16%, pulling ahead of BMW at 12.3%, and Mercedes at 12.1%. For BEVs, VW claimed a 20.2% share, this time ahead of Renault at 18.1%, Smart at 11.6% and Tesla at 11.1%.

Around 70% of the battery-electric car parc was allocated to the small-car (33%), compact (19.6%) and mini (17.3%) segments. The stock of battery-electric passenger cars in the SUV segment, which has a high number of registrations, reached a share of 14.4%.

While the KBA has yet to confirm the total number of new-car registrations in 2020, at the end of last year Autovista Group’s Schwacke projected a recovery to just under 3.1 million in 2021. This would follow an expected registration volume of 2.9 million new cars in Germany in 2020.

UK 2020 new-car registrations show lowest annual volume since 1992

New-car registrations in the UK plummeted by 29.4% in 2020. Autovista Group senior data journalist Neil King explores the latest figures and the market outlook.

The lowest annual volume of new-car registrations since 1992 was recorded in the UK in 2020. The total for the year was 1,631,064 units, according to data released by the Society of Motor Manufacturers and Traders (SMMT). The UK emerged from its second lockdown on 2 December, only to see new regional restrictions imposed from 16 December. These led to a 10.9% year-on-year fall in new-car registrations during the month, with 132,692 new cars joining UK roads. Registrations of petrol cars (including mild-hybrid petrol) declined 32.9% in 2020, but still held a 62.7% share of the market. Demand for diesel cars (including mild-hybrid diesel) plunged 47.6%, accounting for just under a fifth of the market.

Registrations of hybrid cars grew by 12.1%. Following a dry spell as the UK Government removed grants for plug-in hybrids (PHEVs) in 2019, the technology enjoyed a resurgence in 2020, with registrations increasing by over 90%. Moreover, demand for battery-electric vehicles (BEVs) surged by 185.9% and electrically-chargeable vehicles (EVs) accounted for more than 10% of registrations, up from just over 3% in 2019.

New car registrations full year 2020 SMMT graph

Source: SMMT

‘Encouragingly, there is room for further growth as most of these [EV] registrations (68%) were for company cars, indicating that private buyers need stronger incentives to make the switch, as well as more investment in charging infrastructure, especially public on-street charging,’ the SMMT stated.

Mike Hawes, chief executive of the SMMT, added; ‘with manufacturers bringing record numbers of electrified vehicles to market over the coming months, we will work with the government to encourage drivers to make the switch, while promoting investment in our globally-renowned manufacturing base – recharging the market, industry and economy.’

The market contraction in December was in line with Autovista Group’s forecast for the month, and therefore for the year too. There is turbulence ahead as England and Scotland have reintroduced national lockdowns and there are ongoing restrictions across the rest of the UK. These measures will hinder the automotive recovery in the UK, at least in the short term. ‘While click-and-collect can continue to provide a lifeline, it cannot offset the impact of showroom closures. With a vaccine programme now underway, however, in 2021 there is the potential to drive a recovery that would also support the UK’s environmental goals,’ the SMMT commented.

Possible 21-29% improvement

Autovista Group’s latest base-case forecast predicts a 25% improvement in new-car registrations in 2021, to just over two million units, and further growth of 7% in 2022. This is predicated upon vehicle deliveries being largely unimpaired and the car market being able to recover from current lockdowns and restrictions later in 2021.

UK new car registrations forecast graph 2020

In a downside scenario, however, greater disruption to new-car registrations (and supply) is assumed for 2021, leaving limited opportunity for recovery of the losses later in the year. The forecast for this worst-case scenario is for UK new-car registrations to recover by only 21% in 2021, remaining below two million units, with further growth of only 5% in 2022.

In a more positive upside scenario, disruption to the UK automotive sector will be even more short-lived than in the base-case forecast, with dealers quickly overcoming supply shortages and returning to full operational capacity. The 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 29% in 2021, to over 2.1 million units, and expand by 9% in 2022.

No-deal averted

Furthermore, following a year of unprecedented difficulties, the European Union and the UK reached an agreement on Christmas Eve for a Brexit deal. This has averted the dreaded ‘no-deal’ scenario and accompanying tariffs on car imports and exports. ‘Given seven out of 10 new cars registered in the UK in 2020 were imported from Europe, the continuation of tariff- and quota-free trade is critical to a strong new-car market in the UK,’ the SMMT emphasised.

Nevertheless, as the UK no longer follows the EU’s rules on production standards, checks on goods have been introduced. This, in turn, creates more paperwork and red tape, which may result in delays if goods arrive at ports unprepared. However, the deal does include a 12-month grace period on some elements of the ‘rules-of-origin’ declarations, which require exporters to certify goods qualify as locally-sourced, allowing them to avoid tariffs. Businesses will have a year to obtain supporting documents form third-party suppliers, giving some companies more time to adapt.

Used Car Market November 2020

Used Car Auction Wholesale Market

With the UK once again in lockdown throughout November – to varying degrees and duration depending on where you live – it was inevitable that the used car market would be affected. Fortunately, businesses and the buying public were better prepared this time around with the impact not as severe as it could have been. However, all three of the key measures – first-time conversion rate, percentage of original cost new, and sales volume index – were lower than in October. At 68.8% the first time conversion rate was 14.1% lower than in October and 16.4% lower than November 2019, whilst sales volume was also significantly reduced. The average percentage of original cost new achieved was less affected, down only 3.6% month-on-month and 1% higher year-on-year. This suggests that whilst fewer cars were selling, they were still achieving similar values.

first time conversion rate graph November 2020
Used car market % original cost new graph November 2020
Used car market sales volume index graph November 2020

Whilst auctions were not quite as busy during Lockdown-2, our Editorial team noted that buyer behaviour was generally the same as the month before. Cars that had condition grades towards the upper end of the scale and requiring work were out of favour, only selling if they represented a real bargain, often struggling to attract any bids at all. Desirable stock remains popular, and feedback suggested that late plate cars performed better than would usually be expected. This is likely to be, at least in part, due to this year’s much lower new car registrations and the extended lead times for new car supply – both factors that make an “almost new” car a more appealing prospect than it may have been in more “normal” times.

Despite the substantial growth in registrations of alternative fuelled cars in the new market, it appears that the used market is yet to catch up. As the chart below shows, the first-time conversion rates for hybrids and BEVs continue to lag behind those of ICE cars, and it is particularly surprising for BEVs due to their relatively low volumes in the auction environment. This may be due to the buyers of used cars tending to be warier of change, preferring to spend their hard-earned money on a car with a more familiar propulsion system, but it could also be due to the types of BEVs that are available on the second-hand market.

Most feature older generation technology, with real-world ranges of less than 120 miles, and whilst in reality that would be suitable for many (assuming they can charge it at home), it requires a leap of faith to move away from a petrol or diesel car that will comfortably travel 500 miles or more on a tank of fuel. It is not helped by the fact that their new contemporaries often have two to three times the range, and so many may well be adopting a “wait and see” approach to the purchase of their first second-hand battery electric vehicle.

first time conversion rate fuel split graph November 2020

Used Car Retail Market

It should come as no surprise that used car retail sales were down markedly in November – 32.7% less than the preceding month and 34.0% lower than November 2019. This is undoubtedly a result of the travel and contact restrictions resulting from the second lockdown, although the average value of those completed sales was 0.1% higher than that recorded for October and 4.7% higher than the same month last year. Impressively, whilst their average value increased, the average age of the cars sold also continued to increase, up to 51.3 months from the 48.6 months recorded for the previous month and 40.5 months for November 2019.

Used car market retail observations November 2020
Used car market average sale price graph November 2020

Glass’s Live Retail pricing tool shows that, despite the challenges faced by the used car retail market in November, the average time a car spent on the retail forecourt was 38 days, only 2.5 days longer than in October but 4.4 days less than the 42.4 recorded for November 2019. The average discount required for the sale continued to be less than for the same month last year, down to 2.5% from 3.4%. This did represent an increase over the 1.8% recorded for October, but given the circumstances, it is still impressive.

Used car market average days to sell graph November 2020

Next Month

December is usually a “challenging” month for the UK used car markets, with Christmas somewhat of a distraction and effectively making it a three-week month. For 2020 we have the added complexities of the Coronavirus-related restrictions so it is reasonable to expect a continuation of the trends seen in November. The looming spectre of Brexit and the possibility of a tariff-driven increase in the cost of new cars may help to promote the sale of younger used cars, but as that is still an unknown at the time of writing it must be added to the list of possible factors. Some buyers may well hold off on a used car purchase until the New Year, but the one thing we have learnt from 2020 is that it is anything but predictable!

New Car Market Update December 2020

As expected ‘Lockdown-2’ in England and similar restrictions across the rest of the UK hurt the new car market in November. Total registrations fell by 27.4% or 42,840 units compared to November last year, according to figures published by the Society of Motor Manufacturers and Traders (SMMT). This equates to a year-to-date drop of 663,761 units or 30.7%.

This hit was not as bad as in ‘Lockdown-1’ where restrictions decimated registrations, as the industry has had time to implement ‘Click and Collect’ and other socially distanced delivery options, to keep the sales cogs turning.

Diesel sales continue to dissolve, down 56.2% to just 15,925, while mild-hybrid diesel registrations only increased by 7.9%, to 4,719 units. The two totals combined mean diesel cars achieved only 18.1% market share, down from 26% in November last year. The figures for pure diesel engines are a long way from their peak of 52% in 2012, as shown in the chart below.

Diesel car market share graph November 2020
Data courtesy of SMMT

The results were far more positive for alternative fuel cars, with battery electric vehicles (BEVs) and plug-in hybrid vehicles (PHEVs) increasing their volume over last year by 122.4% and 76.9% respectively. BEVs enjoyed their third-highest ever monthly market share at 9.1%, while PHEVs also built their share up to 6.8% for the month. This means zero-emission capable cars almost outnumbered diesel and mild-hybrid diesel.

Looking forward to December, the relaxation of lockdown rules with the potential of three COVID-19 vaccines may boost consumer confidence. Add to that a positive resolution to Brexit negotiations (still not concluded at the time of writing) and some end of year sales and marketing drives, and the year may end on a high, giving hope that 2021 will be positive for the automotive industry in the UK. If the Government does not secure a free-trade agreement, we may be in for a bumpy ride.

European Commission’s sustainable mobility strategy far from reality, says ACEA

The European Commission has drawn back the curtain on its Sustainable and Smart Mobility Strategy, with an action plan of 82 initiatives that will direct transport policy in Europe. It sets out how the EU’s transportation network can achieve its green and digital transformation, resulting in a 90% cut in emissions within the next 30 years. These new initiatives will set the standard over the next four years, with additional industry targets set for 2030, 2035 and 2050.

While the automotive sector has recognised the need to boost the uptake of zero-emission vehicles, the European Automobile Manufacturers’ Association (ACEA) has warned that some of the Commission’s ambitions could be a stretch. It explains the industry already dedicates much of its yearly €60.9 billion research and development budget to decarbonisation, as electromobility and digitisation shape a cleaner future.

Sustainable milestones

By providing clear milestones, the European Commission hopes to keep the transport system’s journey towards a smart and sustainable future on track. This includes ensuring there are at least 30 million zero-emission cars in operation by 2030, as well as the large-scale deployment of automated mobility, and climate neutrality in 100 European cities.

By 2050, the Commission wants nearly all cars, vans, busses and new heavy goods vehicles to be zero emission. It also expects there to be a fully-operational, multimodal Trans-European Transport Network (TEN-T) for sustainable and smart transport with high-speed connectivity.

‘To reach our climate targets, emissions from the transport sector must get on a clear downward trend,’ said Frans Timmermans, executive vice-president for the European Green Deal. ‘Today’s strategy will shift the way people and goods move across Europe and make it easy to combine different modes of transport in a single journey. We’ve set ambitious targets for the entire transport system to ensure a sustainable, smart, and resilient return from the COVID-19 crisis.’

82 initiatives

To achieve these goals, the Commission’s strategy outlines 82 initiatives within 10 key areas for action. So, for transport to become more sustainable, practical measures will need to be taken. This includes boosting the uptake of zero-emission vehicles, which can be targeted by installing three million public charging points and 1,000 hydrogen filling stations by 2030. The strategy also outlines the need to make urban mobility healthy and sustainable, for instance, by doubling high-speed rail traffic and developing extra cycling infrastructure over the next decade.

In terms of smart innovations, the Commission wants to see more connected and automated mobility, like allowing freight to seamlessly switch between transport modes. The strategy also plans on boosting the use of data and artificial intelligence, which could include supporting the deployment of drones and unmanned aircraft.

Reality check

Taking note of the Sustainable and Smart Mobility Strategy, ACEA acknowledged the objective of boosting the uptake of zero-emission cars. However, it warned the ambition to have 30 million of them across European roads by 2030 could be unrealistic. ‘Unfortunately, this vision is far removed from today’s reality,’ cautioned ACEA director-general, Eric-Mark Huitema.

New research by the association points out that of the 243 million passenger cars on the road in Europe last year, less than 615,000 fell into the zero-emission category, making up less than 0.25% of the whole car fleet. ‘To meet the Commission’s objective, we would need to see an almost 50-fold increase in zero-emission cars in circulation on our roads in just 10 years,’ Huitema explained.

He went on to say that despite industry investment and a growing market share, not all the right conditions were in place yet to take such a massive leap, such as the availability of charging points. ‘The European Commission should match its level of ambition for rolling out infrastructure across the EU with its ambition for reducing CO2 emissions from vehicles. It is quite simple: the higher the climate targets become, the higher targets for charging points and refuelling stations should be. Unfortunately, we still see a mismatch between these two elements at EU level,’ he warned.

A recent report by ACEA identifies the need for the deployment of 15 times more infrastructure over the next 11 years to meet the Commission’s target of three million public charging points, up from 200,000 last year. The association is therefore calling again for an urgent review of the Alternative Fuels Infrastructure Directive, to push national governments to invest.

‘Experience has shown us that a voluntary approach to these infrastructure targets does not work,’ stated Huitema. ‘While some EU countries have been very active, others have done little or nothing. The AFID review really must include binding infrastructure targets for member states.’

Apart from infrastructure, ACEA also identified other necessary measures to encourage consumers to make the switch to zero-emission mobility. This included the need for more aggressive carbon pricing, the continuation of fleet renewal schemes, as well as the re-training of sector workers.

Launch Report: Hyundai i20 – sportier and more attractive

The third-generation Hyundai i20 has a stronger, sportier, and more attractive design, with tight lines and a prominent rear-quarter window, reveals the latest model launch report from Autovista Group. The model is longer and wider, which translates into more interior roominess and a 352-litre boot, which is among the largest in the B-segment.

The level of standard equipment is high and so the i20 has a very limited number of individual options available. This makes it easy for customers to configure vehicles and leads to many well-equipped used cars. The digital instrument cluster and central touchscreen in particular support the attractiveness of the interior, and strike a good balance between too many buttons and too few.

The report notes that the engine offer is rather limited, with only two petrol engines and no diesel, electric or full-hybrid versions. There is a mild-hybrid (MHEV) version but this has a battery in the spare-wheel well, reducing the boot volume to 262 litres.

The B-segment is very competitive and the i20 faces strong rivals, such as the Opel/Vauxhall Corsa, Renault Clio, SEAT Ibiza and VW Polo. Given that the segment is mainly driven by price considerations, the list prices of the i20 are rather high. In Spain for example, the price of the i20 version under review is in line with the Corsa and Polo, but it is more expensive than the best-selling SEAT Ibiza.

Nevertheless, in Germany, the i20 has recently won AutoBild magazine’s ‘Goldenes Lenkrad 2020’ – a popular reader’s choice award – in the category for cars with a list price below €25,000.

Click here or on the image below to read Autovista Group’s benchmarking of the Hyundai i20 in France, Germany and Spain. The interactive launch report presents new prices, forecast residual values and SWOT (strengths, weaknesses, opportunities and threats) analysis.

Launch Report Hyundai i20 November 2020

Used Car Market Update November 2020

Used Car Auction Wholesale Market

The UK used car auction market cooled a little in October. The performance was still good, but the three key measures of First Time Conversion, Percentage of Original Cost New, and Sales Volume were all slightly lower than in September. Sales volume was once again higher than the same month last year, while the percentage of cost new also exceeded that achieved in October 2019, up 4% even though the average age of the cars sold was only 2 months lower (84.2 months in October 2020 versus 86.2 months in 2019). The first time conversion rate was down from September’s 85.0% to 80.1%, although that is still a respectable result given the ongoing challenges.

Used car market first time conversion rate graph November 2020
used car market original cost new graph November 2020
Used car market sales volume index graph November 2020

Glass’s Editorial team observed that buyers became more selective during September and this trend continued into October. In that respect the October market appeared to be back to “business as usual”, with desirable cars – good condition and specification – selling relatively quickly and achieving stronger values, with cars of lower grading and specification struggling to make credible values, or in some cases even attract bids.

With this in mind, vendors must present cars at the highest standard. This means documents, keys and, where appropriate, charging cables must be present at the sale. The latter is very important even with the current relatively low volume of plug-in cars, as the significant cost of replacement cables means their absence directly impacts values achieved at auction.

Today, with purely online sales, vendor “presence” is incredibly important to maintain buyer participation in auctions. It is easy for buyers to follow more than one auction simultaneously, regardless of location. Therefore, to maintain sale momentum, a vendor who makes quick decisions on bidding and provisional sales creates a more animated sale with more enthusiastic bidding. This is because buyers know immediately what they have bought and as a result what they still need to look for.

The Glass’s Editorial team continue to monitor auctions remotely. The majority of UK auctions are currently held online and the data shows that buyers have transitioned to this new way of working quickly.

Used Car Retail Market

October’s used car retail market reflected the auction market and continued to follow the trends seen in September. The number of used retail sales declined 6% compared with September and saw a 16.2% decline versus October 2019. However, the average sale price continued to rise, up 1.5% over the previous month and 7.5% versus October 2019. These increases in the average sale price are particularly notable given the average age of retail used cars sold in October was 48.6 months, compared with 47.5 months in September and 39.4 months in October last year.

Used car market retail observations graph November 2020
Used car market average sale price graph November 2020

Glass’s Live Retail pricing tool measures the length of time a car spends on the retail forecourt. The average 35.4 days for October saw cars selling 2.3 days faster than the September average of 37.7 days and 3.5 days faster than October 2019. The is the fastest average sale time of the past two years. Additionally, the average discount required to achieve the sales in October was 1.8%, also much lower than the 3.0% recorded for October 2019. This increases the picture of a relatively healthy used car retail market in October 2020.

Used car market average days to sell graph November 2020

Next Month

October proved to be a relatively good month for both the wholesale and retail used car markets. The Welsh lockdown for the latter half of the month did not appear to have a notable adverse effect on the national market figures – September’s trends continued into October and the overall results were good.

However, with England in lockdown for much of November, it is reasonable to expect a reduction in performance for the key metrics. The English Lockdown-2 is not as restrictive as the one earlier in the year, and many car sales outlets are prepared for it this time around with ‘Click and Collect’ available in many locations. Overall, the effect on November’s sales will not be as pronounced as the fall in sales during Lockdown-1. However, auction values and sales volumes will be impacted, with early reports from the markets supporting this theory.

New Car Market Update October 2020

Following September, new car registrations in October had a relatively low bar to clear to eclipse last year’s total, due to the WLTP emissions testing challenges faced in 2019.  However, once again registrations failed to match last year’s figure coming in 1.6% lower at 140,945, according to the latest figures published by the Society of Motor Manufacturers and Traders (SMMT). This was the lowest October total for nine years and over 10% lower than the average October total over the last decade.

There was potential for an uptick in October, but with the Welsh lockdown towards the end of the month hitting registrations in the region by up to 25%, any momentum fizzled out. On a positive note, October was the least-worse month-on-month comparison versus 2019 (see chart below). The year to date registration total is now down 31%.

Total new car registrations monthly graph November 2020

Data courtesy of SMMT

Pure petrol cars saw a 21.3% reduction while diesel fell a significant 38.4% and accounted for just 14.9% of the new car market in October. However, large increases in mild-hybrid (MHEV) models mitigate these figures as they jumped significantly compared to last October, with petrol MHEV up 545.8% and Diesel MHEV up 56.6%. This shift has played out all year as shown in the year-to-date chart below, as car manufacturers continue to reduce CO2 outputs using mild-hybrid technologies.

New car market fuel type ytd % change graph November 2020

Data courtesy of SMMT

Despite the year’s very low total registration figure, the bright spot continues to be alternative fuel vehicles, especially Battery Electric Vehicles (BEVs). With the registration total of BEVs almost trebling in October compared to last year. The adoption of BEVs is higher in the fleet market, with 43,146 cars registered year-to-date compared to the private market at 26,682. Benefit in kind (BIK) taxation benefits and product confidence make the BEV proposition more compelling to company car users. For private retail customers, the lack of taxation savings, higher list prices (versus internal combustion engine vehicles), lack of knowledge of both longer driving ranges and the potential for the total cost of ownership savings, makes the BEV purchase proposition more difficult for private consumers with the increased upfront financial burden.

Modern classics soaring in desirability

Classic car ownership has never been so popular. Many collectors aspire to own popular models like Jaguar’s enigmatic E-Type Lightweight or Ford’s Capri. Whilst gaining ownership of the Capri might at least be possible for some, with price tags starting around £1,000,000, the very special E-Type is out of reach for those on a budget. Even standard E-Type’s have asking prices starting around £50,000, with some currently advertised at more than double that level. Due to COVID-19, there is the potential that an increased volume of classic cars will rotate back into the marketplace, as the economy bites and unemployment rises.

As we look ahead and consider the classic cars of the future, it is worth considering some of the elements that make them appealing in the first place. It helps if they are a good-looking car, and a sporting pedigree often enhances appeal and value. However, possibly more important is that people have an emotional connection with the model. Today, it is increasingly apparent that a special reminder of one’s youth is highly prized.

Finally, the scarcity of a model has a major effect on desirability and value. Strangely, it also helps that many of the cars considered classics today, were not built to a high standard. Due to this, many were destined for early graves at the scrapyard.

In the year 2000, there were 24.4 million cars on UK roads. In 2019, there were nearly 32 million. Interestingly, the proportion of older cars has increased, with just over 2.3 million cars over 13 years of age in 2000, increasing to over 6 million in 2019. Saving old cars of interest has become big business, fuelled by an ever-increasing nostalgia for modern classics. Ford Escorts and Fiestas, Volkswagen Golfs, and Peugeot 205 GTis from the eighties and nineties are highly desirable today.

Glass’s Leisure Vehicles Editor Paul McDonald said, “Following a significant boost in registrations over the last few months, a slow-down in September was not unexpected, as recent growth was partly a result of pent-up demand following lockdown. So, to see the increases continue is great news”.

With the major auction groups continuing to hold only online sales, some buyers continue to be wary about spending substantial amounts of money on vehicles they have seen in person. However, this trust continues to improve as buyers become more accepting of the descriptions provided by the auction houses.

Additional factors affecting the popularity of older cars

By the mid-nineties, car build quality and reliability had improved dramatically whilst the driveability of cars had also taken a step forward. New cars of today continue these improvements, but many people are choosing to look for older, more characterful cars to drive every day. This is not only down to the price, fueling the demand many enthusiasts strive to drive something unique and with historical interest.

There is no definitive age that identifies a classic car. Many hold the view that a modern classic will be at least 15 years of age, and a classic must be at least 25 years old. However, if you use car tax exemption as a guide, then the car needs to be at least 40 years old.   

Many people find driving a modern classic car is without status, which is a very desirable commodity in today’s world. Especially if a modern classic is relatively easy to afford. So, looking ahead, there are models that could already be considered modern classics. It is also worth remembering that with improved build quality more survivors of each vehicle could also affect the future asking prices.

The following examples are all over 15 years of age and remarkably can be bought today for under £1,000. As beauty is in the eye of the beholder, the decision on whether they are a modern classic is yours.

  • 2003       Jaguar S-Type V6 SE Plus                               £999
  • 2003       Mercedes-Benz SLK200 Kompressor              £995
  • 2001       Audi TT 1.8T Quattro 2dr                                 £999
  • 2000       Land Rover Discovery GS                               £995
  • 2004       MG TF 1.8                                                       £990