Social and Economic Factors are Driving the Car Parc Shrinkage

With monthly costs ranking as the most important factor in car buying according to MotoNovo Finance’s latest Customer Insight research, the fall in car ownership reported by the SMMT comes as little surprise. Economic and social factors along with associated environmental drivers, are seeing an evolution in consumer and business behaviours.

As the UK car parc shrank in 2021, according to newly released SMMT data, to a little over 35M units, MotoNovo Finance MD Karl Werner believes that while part of this trend can be attributed  to the fall in new car sales, the industry cannot ignore changes in social and economic factors; “We have just published our latest Customer Insight research, undertaken in April and early May. Budgetary factors are a significant issue right now. With hybrid working becoming embedded, increasing environmental concerns and for some, associated Clear Air Zone (CAZ) costs and moves to lower cost commuting options including bicycles, e-bikes and e-scooters, alongside a return to public transport are inevitable.”

At the same time as the SMMT published its data, the Scottish Government confirmed that low-emission zones are now formally in place in Edinburgh, Glasgow, Aberdeen and Dundee. It is a move being seen across the UK. The action in Scotland will eventually see many older vehicles barred from some streets, with owners of such cars facing a £60 fine for entering them.

While the fines are not yet in place, the move will inevitably see motorists assessing their options, whether to change to a newer car or change their commuting or travel habits. With budgets under increasing pressure, the potential for some to move away from a car is very real. As Karl concludes: “It is hardly surprising that the car parc has fallen in size given the pressures economically and environmentally. It all points to an evolving landscape for car retailing and aftersales. It is one we cannot ignore.”