Motor Industry Update 5 November 2020

Volkswagen ID.3 - Electric Vehicles Volkswagen ID.3 – Photo courtesy of Volkswagen

For the first time in European history registrations for electrified vehicles overtook diesel

September saw the volume of BEVs, PHEVs and HEVs make up one in four of the new cars registered in Europe for the first time with the Volkswagen Group being the biggest winner due to its new EVs and their Volkswagen ID.3 which has got off to a very good start.

2020 has been a turbulent year for the global car market, particularly here in Europe and although car registrations dropped by 29% during the first nine months to 8.54 million units, indications are that Europe is on the cusp of an electric revolution.

The fall of the diesel car

During the same period, we have seen the diesel market at a record low of 24.8% in September. Ten years ago, diesel cars made up 50% of new registrations and the market share for EVs was below 1%.

This changing landscape has allowed the Volkswagen Group to overcome the diesel-gate scandal of 2015 and become a new protagonist in this chapter of vehicle electrification. Last month, VW registered 40,300 electrified vehicles in Europe, making them the second largest EV seller behind Toyota.

The market landscape of hybrid vehicles

September also saw hybrids and mild hybrids represent 53% of total EV registrations, with their volume growing by 124%. Toyota and Lexus dominated this sector with 32% market share, however further growth was driven by Ford, Suzuki, Fiat and BMW. The volume was also boosted by the Ford Puma, the Fiat 500 and the Fiat Panda, whose hybrid version counted for 59% and 41% respectively.

UK car production falls -5.0% in worst September since 1995

Output was down -5.0% in September, as UK car production registered the worst performance for the month in 25 years, according to the latest figures published by the Society of Motor Manufacturers and Traders. Factories in the UK turned out just 114,732 cars, which is a decline of around 6,000 units on the same period last year, as companies continue to battle with the uncertain economic and political environment and COVID-related challenging global market conditions we all find ourselves in at the moment.

Exports saw a decline of -9.7% in September to 87,533 units, which is 9,500 fewer vehicles year-on-year, as shipments to key overseas destinations such as the EU, the US and China fell. Production for the UK however climbed 14.5%, which is an increase of 3,440 vehicles, largely as a result of new model introductions.

On a slightly brighter note, the production of the latest battery electric vehicles (BEVs) grew 37% year-on-year, with the majority (76.6%) exported, many of these into the EU. With the prospect of a ‘no deal’ Brexit, these figures come as SMMT analysis shows how a 10% World Trade Organisation tariff would increase the cost of UK-made electric cars exported to the EU by an average £2,000 per car.

British engine production declines -2.4% in weakest September since 2014

It has been the worst September since 2014 with just 216,643 engines being built in the UK as output declined -2.4%. Production for domestic and overseas markets fell -0.8% and -3.3% respectively. Year-to-date output also remains down -31.4% with Q4 also looking equally challenging.