There had been a lot of optimistic noises from various industry sources about how a backlog of orders and pent-up demand would generate a big month for new car sales in September, but that looks to have largely been wishful thinking, with a disappointing set of results published this morning.
New car registration data from the Society of Motor Manufacturers and Traders (SMMT) showed that the overall market was down more than 4% on the same month last year, resulting in the lowest number of September registrations since the twice-yearly number plate system was introduced back in 1999.
Data paints a bleak picture
Since dealerships started reopening across the UK in June, there has been the expectation that a lot of the registration results for June/July/August would have been the delivery of pre-lockdown orders, while most new customers would be placing orders for September delivery with the latest 70-plate number plates.
There have been mixed messages from the automotive world over the last few months, with some sources predicting a bumper September as the oft-repeated “pent-up demand” from three months of closed dealerships was finally released. Others were more cautious, suggesting that customer traffic was still slow.
September registrations always include a lot of orders placed in between April and August by customers who want the latest number plates on their new car. The fact that numbers were still down despite the “pent-up demand” shows that the underlying market is still very weak. With the likelihood of further movement restrictions and job losses set to affect much of the UK in the run-up to Christmas, the prospects for new car sales for the rest of 2020 look grim.
Consumer sales continue to lead the way
As has been the case since dealers reopened in June, the private new car market has outperformed the fleet market, as companies delay or reduce spending as much as possible. The consumer market is being largely propped up by returning PCP finance business, as customers can’t afford to pay out their balloon amounts and are essentially forced into buying another new or used car.
Private new car sales were down 1% compared to last September, while fleet registrations fell nearly 6%. Business registrations, which only make up 2-3% of new car sales anyway, were down 32% year-on-year. With business conditions looking bleak for the foreseeable future, the car industry will be frantically trying to cut supply of affected models. Which brings us onto the subject of diesel…
Electrified cars outsell diesels for the first time
Consumer sales outnumbered fleet registrations in September for the first time in many years, which contributed to another terrible month for diesel car registrations as diesel sales rely heavily on fleet customers.
We suggested a few months ago that the coronavirus could kill off diesel cars altogether, and today’s results showed that electrified cars (hybrids, plug-in hybrids and fully-electric cars) outsold diesel cars for the first time. To do so in one of the biggest sales months of the year is even more significant.
Several car manufacturers have been withdrawing their diesel engines from sale, and even some models that are largely reliant on diesel engines have been dropped. The silver lining in all this is that it might finally slow down the diesel-powered SUV juggernaut and lead customers back to traditional saloons and estates (which are generally much better vehicles anyway, to be frank).
Good month, bad month
Against an overall market that was down 4% compared to last year, there was quite a lot of volatility in how different manufacturers performed.
Some brands did particularly well. Audi, Bentley, Dacia, Honda, Jeep, MG, Nissan, Skoda, Smart, Suzuki, Toyota and Volkswagen all recorded results that were at least 10% better than the overall market.
Audi did particularly well, jumping to third overall in the market behind perennial best-sellers Ford and Volkswagen. Budget brand MG also recorded another massive month – up 170% year-on-year – continuing its relentless rise up the charts and having already sold more cars in the first nine months of this year than it did in all of 2019.
On the other hand, it was a much bleaker September for Alfa Romeo, BMW, Citroën, DS Automobiles, Hyundai, Jaguar, Maserati, Mazda, Mercedes-Benz, Mini, Mitsubishi, Subaru and Vauxhall, which were all at least 10% behind the overall market results.
Vauxhall Corsa is top of the pops in September
The 2020 supermini slugfest continued in September, with the new Vauxhall Corsa regaining top spot from its arch enemy, the Ford Fiesta. The Volkswagen Polo also had a good month to finish fourth in a strong month for small cars.
With September always being a strong consumer month, combined with a weak fleet market, there were a couple of surprises in this month’s top ten. The Ford Puma ranked seventh and the Volvo XC40 popped up in ninth place, while the Ford Focus fell to tenth place. This means that both the Vauxhall Corsa and Volkswagen Golf have now overtaken the Focus in year-to-date registrations.
As always, we’ll have a deeper dive into the monthly top ten in the next few days.