COVID-19: New car sales lowest for nearly three decades as lockdowns crush demand | Business News

New car sales fell to their lowest level in nearly three decades last year as coronavirus lockdowns crushed demand, according to industry figures.

Just 1.63 million vehicles were registered in 2020, the fewest since 1992, data from the Society of Motor Manufacturers and Traders (SMMT) showed.

It was a 29% fall compared to the previous year – the biggest annual slump since 1943, a time when British industry was repurposed for the war effort.

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That represented a loss of £20.4bn in turnover.

The car sector was particularly badly hit in April, the first full month of national lockdown, when sales fell by 97%.

Showrooms gradually reopened in June.

SMMT chief executive Mike Hawes said: “We lost nearly three quarters of a million units over three or four months, which we never got back.”

Dealerships were shut again in November and, though many were better prepared with click-and-collect options, they still saw a 27% decline.

Further lockdowns announced this week will add to the pressure and the SMMT again expects sales to be less than two million this year, having previously been above that level every year since 2012.

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The figures showed demand for diesel cars fell by more than 50% and petrol by 37% but it was a bumper year for battery electric and plug-in hybrid cars.

They represented one in ten new car sales, up from one in 30 in 2019.

The sector has also been waiting for the outcome of trade talks between the UK and the European Union, its largest export market.

A last-minute deal reached on Christmas Eve will mean tariffs are avoided but the industry is warning it still faces additional costs from extra red tape as a result of Brexit.

Mr Hawes said: “2020 will be seen as a ‘lost year’ for automotive, with the sector under pandemic-enforced shutdown for much of the year and uncertainty over future trading conditions taking their toll.

“However, with the rollout of vaccines and clarity over our new relationship with the EU, we must make 2021 a year of recovery.”