Car industry downgrades outlook after worst February in six decades

The automotive industry has downgraded its expectations for the year following the worst February for car sales since 1959.

Just 1.83 million new cars will be registered in the UK in 2021, according to the latest prediction from the Society of Motor Manufacturers and Traders (SMMT).

In January it had forecast a figure of 1.89 million.

The change comes after demand for new cars fell by 36% last month compared with February 2020.

Only 51,000 new cars were registered as showrooms remained shut.

February is generally a slow month for car sales due to many motorists waiting for new number plates to be released in March.

If the prediction of 1.89 million new cars being registered this year proves accurate, it would represent a 16% rise from 2020 but an 18% decline compared with 2019.

SMMT chief executive Mike Hawes said: “February is traditionally a small month for car registrations and, with showrooms closed for the duration, the decline is deeply disappointing but expected.

“More concerning, however, is that 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 loss from the past year.”

Demand for diesel cars was down 61% last month, with petrol models declining by 45%.

Sales of battery electric and plug-in hybrid cars continued to buck the overall trend, with rises of 40% and 52% respectively.

They took a combined market share of 13%, up from 6% during February 2020.

Rachael Prasher, managing director of automotive magazine and website What Car?, said: “Online retail and new digital platforms have proven an effective solution to meet the most urgent demand, but the February results once again show the pressing need to safely reopen showrooms.

“With dealers having to keep doors closed through the March plate change – when a fifth of all annual registrations are traditionally completed – all the signs are pointing towards a need for retailers to be ready to satisfy pent-up demand that is building around the mooted April 12 reopening date.”

Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said it is “not all doom and gloom” for car dealerships.

“The end of lockdown is in sight and the planned reopening of non-essential retail will be a huge relief to many in the motor industry,” she said.

“The new registration plate launching in March will also further spur consumer purchases in the coming months, and, as consumer confidence grows, many will hope to see new car sales grow accordingly.”