CEO Update

Industry needs showrooms to reopen at the earliest opportunity

05 February 2021 #CEO Update

Whilst the service and repair sector has been operating throughout lockdown, retailers have remained closed for all but click and collect during the majority of January, and, off the back of a £20.4 billion loss in revenue for the sector last year, the news that new car registrations fell by -39.5% last month highlights the incredibly tough environment in which the automotive industry is operating.

The last time January sales were this low was in 1970 and, with March fast approaching, the need to reopen car showrooms at the earliest opportunity is clear. While the current lockdown is absolutely necessary to suppress the virus, with the vaccine rollout gathering pace hopefully to get us out of lockdown, the industry needs a pathway to reopening. Retail showrooms are Covid-secure. They are usually large premises with high ceilings and low footfall, often managing customers on an appointment basis. Click and collect is helping but this cannot be a long-term substitute for the showroom experience.

Lifting the shutters will help secure the jobs and livelihoods of our workers, re-energise the consumer demand needed to support our manufacturing and enable us to continue on the Road to Zero by getting more of the latest electrified vehicles onto our roads.

Indeed, despite the overall downturn in January, battery electric vehicle (BEV) uptake grew by 54.4% to take 6.9% of the market, as the number of available models almost doubled from 22 in January 2019 to 40 this year. Combined, BEVs and plug-in hybrid vehicles (PHEVs) accounted for 13.7% of registrations last month and there was good news too for commercial vehicles, which saw 2.0% growth.

SMMT analysis also released this week showed that 2020 recorded the largest ever fall in average car CO2 emissions, spurred on by increased uptake of BEV, PHEV and hybrid electric vehicles (HEVs). In fact, more than half of all BEVs registered in the past two decades were registered in 2020 alone. Combined with ongoing improvements to petrol and diesel engines, average vehicle CO2 dropped to 112.8g/km – a reduction of -11.8% compared to 2019 and -37.7% compared to 2000.

There can be no let-up in the pace of environmental improvement, however, as the industry must achieve a UK-only CO2 fleet average target of 95g/km this year or face severe penalties. This underscores the need to get showrooms open as soon as it is safe to do so; we must generate the demand required to reach the country’s green goals. Every day that showrooms can safely open will matter, especially with the critical month of March looming.

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