2020 was a testing year for economies across the world. In particular, in the UK, we have been struggling with Covid cases and deaths severely. Businesses have shut forever, some can’t open legally under lockdown, while others are still thriving. Times have truly been uncertain.
When we take a look at the automotive industry the story seems typical of most businesses. Sales have been affected, staff have been lost, showrooms and test driving hasn’t been allowed. But, what does the picture truly look like? Is it really all doom and gloom?
The First Lockdown
Going back to the first lockdown in March 2020 fear of the virus was everywhere. Daily deaths were increasing at a terrifying rate, anywhere you looked online the media was talking about it. Businesses across the world weren’t prepared for just how hard the lockdown laws would affect them.
Lockdown laws meant the closure of all non-essential retail which partially affected automotive companies. For some, they had to close entirely. Others had to learn and adapt very quickly to how they could still remain open and sell. Sanitiser, screens and masks became the necessary norm.
In April, the Society of Motor Manufacturers and Traders (SMMT) reported new vehicle sales had dropped by an astonishing 97.3%!
Heading out of the first lockdown things were at least beginning to pick up again, new car sales for the year were 48.5% lower than 2019. Even with this increase from the previous months, this is still a harsh percentage to be down for any business. Things were going to be tough.
The Tier System
When the tier system came in it felt like some areas of the UK were actually seeing some sort of normality again, people were seeing family for meals out, or getting their hair cut, going back to gyms! The hope for many was that the heat of summer would see Covid die or at least reduce in numbers.
However, as we saw this was not the case. The increase in socialising, laws being broken, tiers not being obeyed sent us spiralling again into harsher rules.
Usually, when September hits with the dawn of another new license plate number there is a boom in sales, but of course, 2020 was not what we expected. It took until October for the knock-on of the sales to see an increase of just over 15% to see the figures still down by 31% on 2019, but this was still an improvement on previous months.
Second Hand Sales Held
Interestingly while used car sales also saw a fall of almost 50% in March by the time it came to October sales actually increased by 4.4%. This could be for a number of reasons: the reduction of offering financing and the stability of people’s jobs making finance a questionable buying option, or perhaps budgets across the UK decreased with people being more scared of the economic impact of the virus on their savings and income.
An interesting potential as to the used car sales market holding well could be the increased adoption of cryptocurrency spending. The past year has seen a phenomenal increase in online spending. Not only that but using online currencies, with the primary thought going to PayPal, there’s also been a huge increase in crypto wallet spending especially within the car industry. Dealerships across the country over the past year or two have jumped on the opportunity to expand their customer pool by making the change to accept crypto such as bitcoin through an official UK crypto partner.
Less Cars On The Road
The majority of workers had to work from home, have been furloughed, or worst of all have seen their jobs lost to redundancies. The law requiring all eligible employees to work from home saw the UK roads drastically quieten. Essentially journeys for food, medicine or key work travel were our only journeys, and for many of us, those trips tend to be less than an hour.
This huge decrease in the average motorist’s mileage has not only already done wonders for the environment with the hole in the Arctic ozone layer closing, but it will have also meant the ‘health’ of cars has been prolonged for many. The decrease in usage for some may mean that they have not needed to upgrade their vehicles as soon as perhaps planned.
Another underrated part of the car sales market is new drivers. Learner drivers have seen their practical and theory tests postponed during lockdowns until laws allow again. Even when lessons were possible again under the tier system, the time it would take for instructors to have to clean the cars after having a learner in had an effect on how many hours they could subsequently do.
So, for many learners, they have seen little point in purchasing a car until they know that they will actually be able to pass their tests and legally drive it. Buying too early would be financially ruining them with the cost of tax, insurance, and perhaps a visit to the mechanic if the car didn’t get used.
A Boost For Electric and Hybrid
One interesting thing I noticed while looking into all this is that one thing the car industry has seen is an increase in hybrid and electric car sales! The shortened and less frequent journeys seem to have patched over the issue that many people had with electric cars due to the need to charge them.
Perhaps the David Attenborough documentary may have also had an impact on drivers wanting to be more environmentally conscientious, but whatever the cause, this has been great for all manufacturers of electric and hybrid cars.
Ahead to 2021
Moving into the new year, 2021 is feeling rather like a déjà vu of last March so far. We’re back in a national lockdown with no sign of an end date yet. The most we know is that Boris Johnson has confirmed schools won’t be returning till an estimated date of March 8th. So, it’s looking like we’ll be in this lockdown for at least another month or two.
Amidst all this, while production of new cars may be at an all-time low since 1954, this still hasn’t stopped manufacturers bringing out their new models with the latest technology. A few personal favourites being:
Porsche’s newest all-electric car, with a range of up to 301 miles, 240KW battery (standard, 280KW with the battery plus), maximum power 408PS. This car looks like electric sex on wheels, the design is so sleek and the power and charging capabilities are really leading the way in making electric cars a truly viable option.
Audi e-tron GT
This stunning Audi model is their answer to the Porsche Taycan. When you look at it this smooth-styled coupe is very similar in its battery technology and platform. While not officially released yet Audi are looking at this car having 435KW battery power which is truly impressive for an all-electric drive. The mileage is likely to be around the 250mile mark due to the increased power exertion. Definitely one I’ll be keeping a close eye on.
This SUV will soon be joining BMW’s growing i-series of electric vehicles. Designed to contest the Mercedes EQC and Tesla Model Y this new BMW model will be epic! The 286hp will really make this car a thrill to drive! Whether it’s a family SUV or a thrill-seekers mountain climber, this car will truly give a top-level driving experience. With an estimated mileage of 278, this bold BMW will be a great electric model to rival the classic engines.
Rounding off; it’s been a difficult year financially for the car industry when you look at the sales. But, on the upside, we’ve all become expert cleaners and the pandemic hasn’t stopped the innovation and leadership of new designs from automotive leaders across the world. All the signs are pointing towards the UK moving into the future, electric cars, crypto payments, the world is changing fast, but maybe this pandemic has caused change for the better?