UK new car sales climb 11.5% in first increase since August

Plug-in models help drive recovery as consumers switch to new technology

Car showrooms will reopen next week, offering hope to the UK's beleaguered automotive industry. Reuters

British new car sales rose 11.5 per cent on the year in March, the first increase since August with new plug-in models helping to fuel the recovery.

Despite showrooms in being closed since January, new registrations rose to 283,964 last month after slumping in February, the Society of Motor Manufacturers and Traders said.

The seemingly optimistic figures for March represent the anniversary of the first lockdown, when the pandemic brought Britain to a standstill and registrations fell by 44.4 per cent.

Mike Hawes, SMMT chief executive, said the past year was the “toughest in modern history” with the automotive sector hit hard by the pandemic.

“With showrooms opening in less than a week, there is optimism that consumer confidence – and hence the market – will return,” he said.

The shift towards new technology proved significant, with plug-in vehicle demand reaching its highest level – a boost for the sector after a first-quarter shortfall of 58,032 registrations during the third lockdown in England – equivalent to a loss of £1.8 billion ($2.49bn) in turnover.

Britain's automotive industry was hammered at the start of the pandemic when car showrooms were closed across the country. For the sector to return to its pre-pandemic levels, SMMT said about 8,300 new cars would need to be registered every trading day for the rest of the year.

By comparison, the industry averaged around 7,400 a day during the past decade and current levels are closer to 5,600 a day.

While click-and-collect options helped the sector survive England’s third lockdown, dealers are looking to recoup some of the £22.2bn lost in turnover since March 2020.

Another saviour was the growth in demand for plug-in vehicles, as the industry works towards the 2030 deadline when the production of petrol and diesel-fuelled cars will be banned.

Battery electric vehicles (Bevs) and plug-in hybrid vehicles (Phevs) took a combined market share of 14 per cent in March, up from 7.3 per cent last year, as the number of models available increased from 72 to 116.

Registrations of Bevs increased by 88 per cent to 22,003 units, while Phevs rose by 152 per cent to 17,330. Sales of hybrid electric vehicles rose 42 per cent to reach 21,599 new registrations.

“New plug-in models are already helping drive a recovery but to convince more retail consumers to make the switch, they must be assured these new technologies will be convenient for their driving needs and that means, above all, that the charging infrastructure is there where they need it, and when they need it,” Mr Hawes said.

He said the industry was set for record growth in April when compared to the same month last year, when showrooms remained shut during the country's first national lockdown.