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Automotive sector – how did it cope with the pandemic?

The pandemic impacted every sector across the UK, and few more so than the automotive sector, with everyone from sellers and manufacturers to suppliers and traders.

In this piece we dig a little deeper into the data to work out if there were any winners or losers…

In 2020, the motor industry in the UK contributed around £15.3bn in added value to the economy, having peaked in 2016 at some £22bn following years of steady rises.  

The UK was home to approximately 3,500 enterprises in motor vehicle, trailer and semi-trailer manufacturing, the highest number among all European countries, with 10.2% having an annual turnover above £5m.

Vehicle sales

Vehicle sales in the UK have been declining since their 2016 peak of 3.1 million units, hitting 1.96 million units in 2020, although the pandemic played a large role in the steep decline.

The UK lost its position as the second largest car market in Europe to France in 2019.

Employment levels

Despite the decline in motor vehicle sales in the UK, the number of people employed in the automotive industry in the UK increased between 2013 and 2020, when there were over 864,000 people employed across all automotive sectors in the UK.

In the manufacturing sector of the automotive industry it’s a similarly positive story, with over 180k people now working in the sector, up from 146k in 2013.

Domestic sales and exports of passenger cars manufactured in the UK

In 2020, demand for UK-built cars dropped by almost 30% to some 921,000 units, with every 8 out of 10 cars assembled in UK plants exported.

The European Union is the UK auto industry's leading trade partner, accounting for roughly 80% of component imports, and EU markets also account for the majority of UK car exports.

The coronavirus pandemic led to historically low sales of new cars in European Union member countries and the UK. In response to COVID-19, car showrooms were closed throughout the spring of 2020 and were restricted for many months after. Vehicle manufacturing facilities also faced temporary closure due to the pandemic. Costs increased, as output volumes of parts and finished products fell in tandem with supply chain disruptions.

The European Union is the main export destination for passenger cars exported by the UK. In 2020, 54.8% of the cars sold by UK-based manufacturers went to member states of the EU. Total exports by the UK to the EU were valued at around £13.6b in December of the same year.

Road vehicle imports

The total import value of road vehicles to the UK remained stable for a number of years before falling away in 2020 as a result of the pandemic.

Commercial vehicle

The commercial vehicle industry in the UK produced roughly 66k units in 2020, a decline of roughly 15.5%, year-on-year, while sales decreased by 92k units over 2019.

Alternative fuelled light commercial vehicles

In 2020, alternative fuel-powered light goods vehicles accounted for just under 2% of new registrations in the UK. While still statistically small, this figure represents a steep increase from 2011 when such vehicles accounted for only 0.1% of the overall market. In 2019, the market share climbed over one percent for the first time.

Passenger car production

The UK produced roughly 921,000 passenger cars in 2020, the fourth consecutive year figures have declined. In both 2009 and 2020, production decreased by nearly a third year-on-year.

In 2019, the United Kingdom ranked 13th among leading car producers worldwide, with China the world’s leading manufacturer, producing a staggering 21 million units.

New passenger car registrations (including by fuel type)

In 2020, there were 1.63 million new passenger cars registered in the UK, a decrease of almost 30% year-on-year (taking the overall number of licensed cars to 31.7 million). While the coronavirus pandemic is widely accepted as the predominant reason for the decrease, new cars have consistently become more expensive with the consumer price index exceeding 115 points in 2020, having grown by about 15 points in the past five years.

The most important feature British consumers were looking for in their new car was fuel efficiency - according to a 2020 survey, 60% of respondents said this was the most important factor when deciding to buy a new car. Vehicle safety, suitability for everyday use, low price, and high driving comfort rounded off the top five.

The electric vehicle market continues to pick up steam - in terms of sales volume, the market share of plug-in electric vehicles reached 10.7%