Brexit and Covid-19 mean new car registrations continue to tumble
Over 2019, the UK’s automotive market saw another year-on-year decline in the sale of new units, thanks to the falling value of the pound, and shrinking consumer spending power. Meanwhile, with Brexit still to be resolved, and the coronavirus crisis shunting the global economy into recession, 2020 looks set to be even worse for the sector.
According to data released by research firm Statista, 2019 saw 2.31 million new passenger cars registered in the United Kingdom. The news compounded the UK automotive market’s declining fortunes, with new car registrations having fallen year-on-year since 2016.
According to the research, the number of registrations in 2019 was 2% lower than the prior year, and 14.2% lower than four years ago, when the market seems to have peaked. The trend of falling registrations coincides with the UK’s decision to exit the European Union, with many speculating that uncertainty since then has put consumers off making large investments.
The purchase of new cars has consistently become more expensive, with the consumer price index reaching 108.1 points in 2018, having grown by nearly 20% in the past eleven years. At the same time, the value of the pound has declined significantly, due to the Brexit process, compounding the stagnant wages many consumers were already seeing shrink their spending power.
Some in the automotive sector might have hoped the decisive election result of 2019 would see the UK’s market begin to recover in these regards – but if anything, things may be about to get worse. While the transition window for Brexit’s finalisation rapidly closes, the coronavirus has seen no progress made, and no inclination that a further extension could be in the pipeline.
Meanwhile, the lock-down has already had a more immediate impact on the automotive market. The Society for Motor Manufacturers and Traders (SMMT) recently found that only 4,321 cars were registered, the lowest monthly level since 1946. The figure makes for an apocalyptic comparison to the 161,064 new cars that were registered in same month in 2019. The SMMT now says it expects just 1.68 million new car registrations in 2020 – a potentially catastrophic fall of 27%.
