What you need to know
Prior to COVID-19, the cars and commercial vehicles market was facing significant challenges. Factors such as Brexit and international trade tensions both triggered uncertainty, reducing business investment and leading to slower economic growth. This impacted adversely on new vehicle registrations. Cars in particular have fared badly helping bringing about a decline in sales in recent years.
COVID-19 will only intensify these trends. The pandemic has already presented significant disruption to car manufacturing and to parts suppliers. Sales opportunities have been significantly limited as car showrooms were forced to close during lockdown opening only on 1 June 2020.
As a result registrations and production are expected to fall significantly in 2020. Registrations are forecast to recover to pre-COVID-19 levels by 2024, however demand for new cars will be held back over the next few years by the economic downturn, high unemployment and consumers’ reluctance to borrow/use car finance schemes.
The extent of the damage could be limited by the introduction of a car scrappage scheme similar to that used in the last financial crisis in 2009. However, there is no guarantee that such a scheme will be offered with support for manufacturers and purchasers likely to come in other ways.
Key issues covered in this Report
The impact of COVID-19 on consumer behaviour and market dynamics in the cars and commercial vehicles sector.
How changes made by manufacturers and retailers will affect production and sales in the future.
What the increasing cost of traditional petrol and diesel engines relative to electric vehicles means for the market, and how manufacturers are preparing for a fuel-free future.
How Brexit has affected the market, and what it might entail for the sector in the future.
Definitions
For the purposes of this report, Mintel has used the following definitions:
Passenger cars: a road motor vehicle, other than a motor cycle, intended for the carriage of passengers and designed to seat no more than nine persons.
Commercial vehicles: a road motor vehicle used primarily for carrying goods: ranging from light commercial vehicles (LCVs), such as vans and vehicles up to 3.5 tonnes; to heavy commercial vehicles (HCVs), such as lorries. This classification excludes buses, coaches and taxis.
