Looking back at 2020 in the rear-view mirror
2020 has been a tough year for everyone. There is no denying that. Like every part of the economy, the automotive industry has not escaped the effects of COVID-19 and the subsequent localised and nationwide lockdowns, with impacts on both sales and manufacturing.
Despite it being a year no one could have anticipated, there are some positives and interesting outcomes for the industry to be taken from the challenges and adversity we have all faced. Looking back at 2020 in a rose-tinted rear-view mirror, here are our top five takeaways:
Resilience and adaptability
Prior to the first lockdown back in March, many dealerships and manufacturers began putting measures in place to ensure the safety of customers and staff as Covid-19 infection rates began to rise. Following the first economic lockdown, the automotive industry showed its ability to adapt, by creating “some of the UK’s safest retail premises”, the Society of Motor Manufacturers and Traders (SMMT) chief executive, Mike Hawes, said back in June.
The aftermarket sector also signalled early its readiness to cope with increased demand for MOT tests, service, maintenance, and repair, with an anticipated rise in requirement as workers avoided public transport and instead turned to private vehicles to travel safely. This was matched with the publication of new sector-specific guidance by a group of leading industry bodies to help companies of all types and sizes in the aftermarket sector to operate safely while minimising the risk of COVID-19 transmission.
Positive signs of consumer demand
The summer months – when COVID-19 infection rates dropped and lockdown restrictions were relaxed somewhat – showed positive signs consumers are eager to get back to showrooms and forecourts to purchase new vehicles. Dealerships began re-opening their doors in June, when promising signs of a temporary recovery were seen, and in July new car registrations shot up by 11.3% compared with the same month in 2019, according to figures from the SMMT.
Even as late as September, as infection rates began to rise ahead of the second spike during the winter months, the new 70-plate helped push just under 330,000 new registrations. Private registrations dropped just 1.1% compared with the same month last year and the National Franchised Dealers Association (NFDA) said their 4,500 franchised retailer members experienced strong consumer demand and high levels of enquiries.
Accelerating online sales
In the past, the automotive industry has been accused of being slow to adapt to the online sales model adopted by most other retail industries. The high street has been hit hard by the rise of digital retailers as consumer habits moved towards purchasing items on their smartphones and laptops. As one of life’s biggest purchasing decisions, however, many consumers still prefer to visit their nearest vehicle retailer to shop for their new car.
The second nationwide lockdown saw dealerships forced to adapt to the new online sales model, however, when click-and-collect became the only option, except for closing their doors entirely and waiting for restrictions to be lifted. “The COVID outbreak has accelerated the adoption of online buying behaviours as consumers and retailers adapt to new challenges,” according the Auto Trader Market Report published in November. The report found 41% of consumers would consider buying a car completely online and the appeal of doing so rose to 61% if the process was clearly explained.
Growing electric vehicle sales
While the rest of the automotive industry saw declines in manufacturing and overall sales in 2020, one area of the market has continued to grow at an astonishing rate. The sale of battery electric vehicles (BEVs) increased by 162.2% in the year up to the end of November, according to data from the SMMT. More than 86,000 BEVs have been registered in 2020 so far, compared to just under 33,000 over the same period last year, raising the market share from 1.5% to 5.8%.
The UK government ban on the sale of new petrol and diesel vehicles was brought forward to 2030 in November – originally set for 2040 – which will only accelerate sales further in the coming years. Indeed, 73% of car buyers said they would consider buying an electric car in the next four years, according to a survey from Auto Trader. Although other alternatively fuelled vehicles (AFVs) have seen a similar increase in sales this year, they too will be phased out, with a ban on new hybrid sales in 2035.
Car Care Plan’s continued support
Car Care Plan has continued to offer products and services throughout 2020 – including during the nationwide lockdowns. Alongside every other business in the UK, Car Care Plan has adapted to the changing situation, allowing us to continue operating and supporting our dealership partners.
We put initiatives in place to support online selling of add-on products and conducted thorough risk assessments on our sites, leading to the introduction of one-way systems, protective screens, hygiene stations, and more. We also issued PPE to all field-based employees and established new ways of working so social distancing rules are adhered to. These measures all ensured the highest safety standards for our employees, visitors, and customers, while minimising business disruption.
What will 2021 bring?
It would be difficult to predict how the coming year will look as there are still so many uncertainties surrounding the COVID-19 pandemic – both in the UK and around the world.
When the automotive industry is able to get back to business as usual – and consumer confidence returns – we’d hope to see an increase in sales as experienced during the relaxation of restrictions in July, as pent-up demand is finally released.