2020 was a testing year for economies across the world and still is.
In particular, in the UK, we have been struggling with Covid cases and deaths severely. Businesses have shut forever, some can’t open legally under lockdown, while others are still thriving. Times have truly been uncertain.
When we take a look at the automotive industry the story seems typical of most businesses. Sales have been affected, staff have been lost, and showrooms and test driving hasn’t been allowed.
But, what does the picture truly look like? Is it really all doom and gloom?
Going back to the first lockdown in March 2020 fear of the virus was everywhere. Daily deaths were increasing at a terrifying rate, anywhere you looked online the media was talking about it.
Businesses across the world weren’t prepared for just how hard the lockdown laws would affect them.
Lockdown laws meant the closure of all non-essential retail which partially affected automotive companies. For some, they had to close entirely. Others had to learn and adapt very quickly to how they could still remain open and sell.
Sanitiser, screens, social distancing and masks became the necessary norm.
Vehicle Sales Dropped in 2020
In April 2020, the Society of Motor Manufacturers and Traders (SMMT) reported new vehicle sales had dropped by an astonishing 97.3%!
Heading out of the first lockdown things were at least beginning to pick up again, new car sales for the year were 48.5% lower than in 2019.
Even with this increase from the previous months, this is still a harsh percentage to be down for any business. Things were going to be tough.
When the tier system came in it felt like some areas of the UK were actually seeing some sort of normality again, people were seeing family for meals out, or getting their hair cut, and going back to gyms!
The hope for many was that the heat of summer would see Covid die or at least reduce in numbers.
However, as we saw this was not the case. The increase in socialising, laws being broken, and tiers not being obeyed sent us spiralling again into harsher rules.
Usually, when September hits with the dawn of another new license plate number there is a boom in sales, but of course, 2020 was not what we expected.
October Saved the Automotive Industry
It took until October for the knock-on of the sales to see an increase of just over 15% to see the figures still down by 31% in 2019, but this was still an improvement in previous months.
Interestingly while used car sales also saw a fall of almost 50% in March by the time it came to October sales actually increased by 4.4%.
This could be for a number of reasons: the reduction of offering to finance and the stability of people’s jobs making finance a questionable buying option, or perhaps budgets across the UK decreased with people being more scared of the economic impact of the virus on their savings and income.
An interesting potential as to the used car sales market to hold well could be the increased adoption of cryptocurrency spending.
Is Crypto Viable for Car Sales?
The past year has seen a phenomenal increase in online spending. Not only that but using online currencies, with the primary thought going to PayPal, there’s also been a huge increase in crypto wallet spending, especially within the car industry.
Dealerships across the country over the past year or two have jumped on the opportunity to expand their customer pool by making the change to accept crypto such as bitcoin through an official UK crypto partner.
There have been many sub-factors to the Covid-19 pandemic that have caused this for the UK.
Firstly, the majority of workers are either experiencing life working from home, have been furloughed, or worst of all have seen their jobs lost to redundancies.
The law requiring all eligible employees to work from home saw the UK roads drastically quieten. Essential journeys for food, medicine or key work travel were our only journeys, and for many of us, those trips tend to be less than an hour.
This huge decrease in the average motorist’s mileage has not only already done wonders for the environment with the hole in the Arctic ozone layer closing, but it will have also meant the ‘health’ of cars has been prolonged for many.
The decrease in usage for some may mean that they have not needed to upgrade their vehicles as soon as perhaps planned.
Another underrated part of the car sales market is new drivers. Learner drivers have seen their practical and theory tests postponed during lockdowns until laws allow them again.
Even when lessons were possible again under the tier system, the time it would take for instructors to have to clean the cars after having a learner in had an effect on how many hours they could subsequently do.
So, many learners have seen little point in purchasing a car until they know that they will actually be able to pass their tests and legally drive it.
Buying too early would be financially ruining them with the cost of tax, insurance, and perhaps a visit to the mechanic if the car didn’t get used.
Electric Car Sales Increasing?
One interesting thing I noticed while looking into all this is that one thing the car industry has seen is an increase in hybrid and electric car sales!
The shortened and less frequent journeys seem to have patched over the issue that many people had with electric cars due to the need to charge them. Perhaps the David Attenborough documentary may have also had an impact on drivers wanting to be more environmentally conscientious.
Whatever the cause, this has been great for all manufacturers of electric and hybrid cars.
Moving into the new year, 2021 is feeling rather like a déjà vu of last March. However, as of April 12th, we've now entered the first stage of lockdowns being lifted. We have some hope for our mental health and for the survival of businesses.
New Car Production Affected
Amidst all this, while the production of new cars may be at an all-time low since 1954, this still hasn’t stopped manufacturers from bringing out their new models with the latest technology.
A few personal favourites are:
Porsche Taycan: Porsche’s newest all-electric car, with a range of up to 301 miles, 240KW battery (standard, 280KW with the battery plus), and maximum power 408PS. This car looks like electric sex on wheels, the design is so sleek and the power and charging capabilities are really leading the way in making electric cars a truly viable option.
- Audi e-Tron GT: This stunning Audi model is their answer to the Porsche Taycan. When you look at it this smooth-styled coupe is very similar in its battery technology and platform. While not officially released yet Audi is looking at this car having 435KW battery power which is truly impressive for an all-electric drive. The mileage is likely to be around the 250mile mark due to the increased power exertion. Definitely, one I’ll be keeping a close eye on.
- BMW iX3: this stunning SUV will soon be joining BMW’s growing i-series of electric vehicles. Designed to contest the Mercedes EQC and Tesla Model Y this new BMW model will be epic! The 286hp will really make this car a thrill to drive! Whether it’s a family SUV or a thrill-seekers mountain climber, this car will truly give a top-level driving experience. With an estimated mileage of 278, this bold BMW will be a great electric model to rival the classic engines.
Rounding off; it’s been a difficult year financially for the car industry when you look at the sales.
On the upside, we’ve all become expert cleaners and the pandemic hasn’t stopped the innovation and leadership of new designs from automotive leaders across the world.
All the signs are pointing towards the UK moving into the future, electric cars, and crypto payments, the world is changing fast, but maybe this pandemic has caused change for the better.
If you're interested in buying a car with your crypto you can contact us today to start your crypto-car journey!