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.

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.