The UK car market in 2020 was particularly hit hard by the coronavirus pandemic, resulting in a sharp 29% dip in new car registrations. Preliminary data from the Society of Motor Manufacturers and Traders (SMMT) show new car registration numbers to be around 1.63 million cars last year, which is down by about 600,000 cars from the year before, Autocar reports.

This is the largest year-on-year decline on record since 1943, mostly due to nationwide lockdowns. Some car factories were even repurposed to produce military equipment, and car dealerships were not allowed to operate from March to June during the first lockdown, followed by another in November.

These saw private car sales drop by 26.6%, while fleet and business sales took a harder hit with a decline of 31% and 41% respectively. In monetary means, the sales slump equates to an industry loss of around £20 billion (RM109 billion), which also cost the UK government £1.9 billion (RM10.4 billion) in VAT receipts.

SMMT CEO Mike Hawes said: “Last year we lost around 500,000-750,000 units between March and May, and we never recovered it. There was a slight uptick in July, but we never got that original loss back. Private buyers may come back in the market later this year, but fleets just delayed. So any loss that we now see in January and February may come back, but it depends on mitigating factors.”

It isn’t all gloom and doom, though. With new government incentives to encourage the adoption of electric vehicles, sales of hybrid and electric vehicles have risen quite significantly. A total of 110,000 electric vehicles were sold in 2020, representing a 180% jump from the year before. EV sales represent 6.6% of the overall car market, up from 1.6% the year before.

Meanwhile, plug-in hybrid sales also rose 90% to 67,000 units, up from 1.5% to 4.1% of the market. That’s a combined total of 10.7% of all cars sold in the UK in 2020 – not bad. This trend is set to continue, seeing as the UK has announced its plans to ban the internal combustion engine by 2030. Consequently, sales of petrol and diesel cars dropped by 8% and 10% respectively.