The two big themes emerging from September’s new car registrations
September’s new car registration figures from the Society of Motor Manufacturers and Traders show a 34.4% year-on-year drop in new car registrations last month. But that’s not the whole story as our Commercial Director Ian Plummer reveals as he shares two big themes emerging from September’s new car registration data.
Supply issues cause new car buyers to consider used vehicles instead
It’s important not to mistake the lower than expected volume of September registrations for a dip in demand. Nothing could be further from the truth. The issue is all about supply. According to our market intelligence, while they’d surely prefer to register more cars and realise revenue sooner, most retailers and brands have record new car order banks.
At some point supply will catch up with demand but in the meantime, the used car market is benefiting. According to recent Auto Trader research, most buyers are only prepared to wait four to six weeks for a new car, and three quarters will happily consider buying a used vehicle if they have to wait any longer. Auto Trader’s search and sales lead data is an effective bellwether of car buying demand, and the picture is very positive.
The volume of views of used cars on Auto Trader in September was 238 million, and the average used car was viewed 326 times, up 4.5% year-on-year. Our proxy sales data – the measure of used car transactions – shows that last month for every 100 cars sold, only 79 entered the market for sale.
The impact of this combination of hot demand and tight supply can also be seen in in the average price of used vehicles on Auto Trader, which stood at £16,067 in September 2021, compared with £13,829 in September 2020. In September, prices for like for like cars were up a colossal 21.4% year on year. That’s a wholly unprecedented rise, and one that shows no signs of slowing with a record jump of 4.2PPTS on August!
Petrol crisis supercharges electric
It is tempting to focus on the lower than anticipated number of September registrations, but that risks missing a standout trend, which is that sales of Battery Electric Vehicles (BEVs) continue to shoot up. One in seven new cars sold in September was a BEV, up from one in fifteen in September 2020.
The petrol crisis was temporary but the impact on consumer attitudes is not. The idea that you’ll always be able to fill your tank has gone out the window. I am sure people will continue to worry about the availability of charge points for electric vehicles, but it will be a long time before they take petrol for granted again. In that respect, one of the big barriers to electric vehicle adoption has been smashed. Range anxiety has been replaced by fuel anxiety.
It’s often said that you should never waste a crisis. The dramatic spike in interest in electric vehicles we’ve seen over the past two weeks suggests that this crisis – as frustrating as it was for millions of motorists – could have a positive impact on meeting climate goals. The increased interest in BEVs represents a unique opportunity to inform, excite and incentivise car owners to make the switch. If the Government is serious about reaching its 2030 targets, then it should seize this opportunity to supercharge electric.
In the last week of September, not only did the number of advert views for new and used BEV models on Auto Trader jump by a record 49% and 66% respectively on the previous week, but we also saw a huge week on week uplift of 56% in the number of people sending enquiries to retailers, with one sent nearly every minute. Indeed, our market health data shows that year-on-year demand for volume brand electric vehicles has almost doubled over the last 7 days. Since 25th September, we’ve seen record levels of interest for new electric vehicles on our platform with more than one in four of all new car advert views being for an electric vehicle. BEVs took the top five spots for the most viewed new cars on Auto Trader. This all suggests that people aren’t simply flirting with the idea of electric but have been inspired to pursue a purchase.
As one might expect, spiralling demand is having an impact on pricing, with the average price of a used volume BEV on Auto Trader 18.2 per cent higher in September 2021 compared with September 2020. However, the average price of a premium used BEV is actually 5 per cent lower than it was a year ago.