Auto Trader's Commercial Director, Ian Plummer, offers his view on the latest new car sales data from the SMMT
These figures paint a picture of a weak new car market - but looks can be deceiving. If you peek under the bonnet, there are all the signs of pent-up demand that could really set the market on fire later this year.
“February is always a relatively weak month for sales as drivers hold fire until March for the new 22 plates before buying. But while sales are down on pre-pandemic levels in February 2020, it does mark an improvement on January.
“Moreover, these figures only show the number of buyers picking up the keys. Speak to any manufacturer or motor retailer, and they’ll tell you that the market is red-hot and that their order books are full to bursting for months to come. Last month Auto Trader saw the volume of new car enquiries increase 44% on the same period last month.
“The car industry’s well-documented issues with semi-conductor shortages have so far acted as a brake on the demand of an army of would-be buyers with Covid savings. But as production ramps up again that dam looks set to burst later this year as new deliveries pick up speed.
“Order books are rammed until at least September, which promises a bumper autumn for the car market and the new 72 plates. In some areas we are seeing demand stretching well into 2023 particularly for commercial vehicles like vans where some brands have stopped taking orders altogether.
“Sales of battery EVs clearly remain a huge source of demand, with sales more than quadrupling compared to two years ago. Sales of plug-in hybrids have doubled as well. It will be interesting to watch how this trend develops in the months ahead.
“Russia’s invasion of Ukraine has sent shockwaves through global energy markets, pushing oil prices to almost $120 a barrel and pump prices to an all-time high. That is likely to concentrate the minds of many drivers, with our research showing that two out of five motorists are already planning on driving less due to increasing fuel prices.
“During last year’s petrol crisis, we saw a surge in consumer engagement for electric cars, a phenomenon we termed ‘fuel anxiety’. Who’s to say that the invasion of Ukraine won’t have a similar impact."
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