Has COVID really been that destructive to the UK’s car industry?
The seismic impact of the Coronavirus has left many industries and businesses reeling from closures and restrictions which make their whole business practices almost redundant. The automotive market has not been without its challenges. The initial lockdown in March 2020 effectively closed our entire new and used car industry for almost 3 to 4 months, has COVID been destructive to the UK car industry?
The initial panic and fear hit the entire country and, in accordance with Government advice and regulation, we retreated to our homes under a Furlough scheme. The outcome of this reaction was that cars, and vans, were neither sold nor delivered.
So it stands to reason that new car registrations were “down” in 2020 compared to the previous year. But is this, as the BBC do candidly report , a true problem for us all – “the lowest registrations since 1992”.
Common sense dictates that registrations were always going to be affected by the COVID restrictions. Indeed, as per the Government guidelines non-essential businesses MUST close.
For “non-essential retail” this includes clothing and homeware stores, vehicle showrooms (other than for rental), betting shops, tailors, tobacco and vape shops, electronic goods and mobile phone shops and auction houses. In contrast, businesses which can open include petrol stations, automatic (but not manual) car washes, vehicle repair garages and MOT services, bicycle shops, and taxi and vehicle hire businesses.
So unless you are involved in a “click and collect” industry or one which has a specific exemption, it is very difficult to operate properly. What the general public needs to appreciate is that many of us have had to develop or reinvent their modus operandi. For us, as a contract hire and leasing broker, our hire element can remain open but we can no longer allow test-drives or physical visits to the premises by customers.
For some of our local database this is frustrating as it created a natural disconnect. However, we have pushed more into online tools and facets which means that a customer can enjoy the online vehicle procurement process from the comfort of their homes.
Rather than focus on the negative elements of the UK’s vehicle industry, it is worth exploring some of the positive aspects. You only have to type in new/used car purchase into google (or look on the TV/radio) to see the rapid growth of a new online purchase industry. With Cazoo, Cinch and HeyCar battling this out with BuyaCar and AuoTrader, the car industry is almost certainly going through an evolution and significant disruption.
Not only that, our leasing industry has grown again as more and more customers aim towards hire-style products. Financial uncertainty and political/social unrest has unnerved a number of customers who make purchase-style commitments to their vehicles. And with residual values going up and down, the consumer is left with a nervousness that they do not want. For our customers, the ability to return the vehicle with no financial consequence is a clear result.
Where our industry has also proved its worth has been with the treatment of customers during the pandemic – payment holidays, mileage reductions and consistent customer service has truly set out the leasing industry as the UK’s foremost route to new vehicles in 2021. And the icing on the cake – the electric car and van revolution.
COVID has accelerated the take-up of Electric Cars, a welcome boost for the UK Car Industry
No longer is it a secret, or disputed, that we are moving away from combustion for our vehicles. 2020 was the seminal year for electrification and our eCarLease team literally exploded with enquiries and deliveries. It isn’t just about the Tesla product either; while the Model 3 was our clear best-seller of 2020, we saw Audi, Mercedes, Hyundai and VW electric cars being delivered to our personal and business customers.
Why was 2020 so key for electric car leasing? One of the reasons, which the BBC reports on is that the Covid events have made us a more ethical consumer. No longer are we taking the world’s health for granted and it is now firmly acknowledged that we have a fragility in our society which cannot be ignored.
The true cost of our combustion vehicles will be felt by subsequent generations and we want to ensure that we leave the world a little better than how we found it! It isn’t just about air quality and sustainability which is fuelling this growth; EV’s are exciting vehicles and they offer a customer a cheaper and more enjoyable motoring experience.
With home-working now a staple for many UK residents, the reducing mileages are making petrol (and definitely diesel) an impractical solution for their needs. With sub-5000 annual mileages, there is no real objection with a 150-250 mile electric range.
Will the UK working habits and practices ever return to normal? That is not something which any of us can answer but it isn’t outside of the realms of possibilities that home working will be a mainstay for many of us. The lack of commuting will reduce the necessity for multiple household vehicles and also for long range vehicle options.
Moving towards an electric vehicle future means that businesses like ours need to educate customers and help them overcome the hurdles. Whether this be cost per mile, charge point location, whole of life costs for charge point installation, we need to ensure than the customer can make a truly informed decision. During 2021, the eCarlease UK will be doing this along with Lythium and the Morphsites digital team . For more information, just get in touch.
Our Latest Electric Car Lease Delivery
In terms of the car shown, the Audi E-TRON ESTATE 230kW 50 Quattro 71kWh Technik 5dr Auto (Pure Electric Vehicle), this is based on the following configuration:
- Typhoon Grey Metallic Paint
- Twin leather – Pearl Beige
- Graphite grey paint finish inlays
- 20″ 5 arm design alloy wheels
As standard the car includes air conditioning, cruise control, LED headlights, multifunction steering wheel, electrically folding/heated/auto dimming exterior mirrors.
Rear view camera, 20” alloys, Audi sound system, air suspension, smartphone with wireless functionality, parking system plus a 360 degree sensor, virtual cockpit, MMI navigation
DAB radio, auto dimming rear view mirror, leather upholstery, gloss styling pack, LED interior lighting pack, Audi pre sense, 4-way lumbar support.
Heated front seats, keyless go and an antitheft alarm. In terms of additional options consider – privacy glass, Bang and Olufsen sound system or the remote pre-conditioning.
On the technical-side company car and business users can note the P11d at £61,295.00 and CO2 at 0g/km. In terms of performance on the electric Audi, the 71kWh battery delivers a WLTP electric range of 195 miles on a full charge and 0-62 times of 6.8 seconds.
In terms of seasonal performance, the e-Tron will offer 150 miles in winter and the 190+ miles in summer. For charge times, expect a 11kW AC rapid AC to fully-charge in 7 hours and a 120kW DC to get 20-80% in 25 minutes. Service intervals on a e-Tron are every 24 months or 18,000 miles, whichever comes first.