I recently wrote my monthly column for BMW Car magazine. The piece followed up on a column from earlier in the year, pondering whether societal attitude shifts caused by the COVID pandemic would be reflected in consumer activity after the first lockdown. Would the virtue signalling being displayed in attitudes to clean air, pollution, globalisation and general quality of life be reflected in consumer behaviour through the remainder of 2020?
To look for signs of this change, I checked the latest new car registration data, which showed the state of play up to the end of September. Figures released by the Society of Motor Manufacturers and Traders (SMMT) show that, despite a fall of less than 5% in year-on-year registrations during September 2020, year-to-date new car registrations are down some 33%. It was not hard to spot the biggest losers.
Diesel Sales down 56%
New diesel car registrations are down 56% over the year to date: 270,000 fewer diesel cars have been registered so far in 2020 vs 2019, with a total market share of 17%. This is partly explained by fewer diesel models post-dieselgate, much lower corporate sales (market majority players and traditional diesel buyers) and lower projected mileages of the remaining fleet buyers. Petrol car registrations are down 40%: some 485,000 units year-on-year, giving petrol a market share just shy of 60%. The big change is that ‘alternative’ – i.e. part- or full-electric – drivetrain vehicles are rising.
To the end of September 2020, 314,655 hybrid and plug-in electric vehicles had been registered. This means that alternative drivetrains now outsell diesel roughly 3 to 2 in the UK. The combined market share for part- and full-electric cars is now 25%.
Bentley, Porsche, Lexus and Toyota
Looking at new car registrations by brand shows the scale of the shift faced by some manufacturers. Of the forty vehicle manufacturers listed in the SMMT new car registration data, only four have seen a year-on-year fall in registrations of less than 20%. They are Bentley (down 17%), Lexus (down 12%), Porsche (down 13%) and Toyota (down 16%).
Volumes obviously differ between these brands. Bentley has registered just over 1,000 cars YTD, while Porsche is higher at 8,653. Lexus steps up a bit with 11,341 cars YTD, but Toyota has registered 73,067 units in the UK this year. To lose just 16% of sales this year versus last, while other manufacturers lose up to 50% year-on-year shows that Toyota has got something right.
Hybrids may hold the key
Cumulative sales data for the hybrid models in Toyota’s portfolio shows that sales of its hybrid models through 2020 are a touch up on last year: 50,608 units this year compared to 48,359 unit in 2019. Toyota’s global hybrid sales now top 15 million units, with the UK accounting for 356,000 Toyota hybrid sales in an EU total of 2.8 million cars (approx. 12.7%).
As the UK is a bigger market in European terms, with a usual share of the EU and EFTA market circa 15%, one might think that the lower penetration of hybrid technology into UK car sales may be linked to company car taxation policy favouring diesel models. However, taxable benefits made it a no-brainer for me to pick a Prius when I ordered my final company car some twelve years ago and that EV tax advantage has only increased since 2008. The UK’s obsession with premium brands and the slow adoption of hybrid alternatives offered by premium (mostly German) manufacturers encouraging a general mistrust of hybrid drivetrains may be a more likely explanation. As we see from the latest data, that perception is now changing rapidly.
Porsche Cayenne E-Hybrid full electric range
Porsche recently announced an increase in the electric range of the plug-in Cayenne hybrid models, as part of a number of updates for the 2021MY. Gross capacity of the high-voltage battery has increased from 14.1 kWh to 17.9 kWh, extending the electric range by up to 30 per cent. All will shake their heads when they hear that the full electric range for the Cayenne E-Hybrid is still less than 30 miles, but this is a big old bus we’re talking about and the technology is still fairly young. It is worth noting that the projected range may be best-case scenario.
The purely electric powertrain in the plug-in hybrid Cayenne & Coupe comprises a 100kW electric motor integrated into the eight-speed Tiptronic S automatic transmission, generating a purely electric top speed of 83 mph. Any increased power demand from the driver or switching to the Sport or Sport Plus driving modes activates the internal combustion engine.
Cayenne E-Hybrid (RRP £69,980) has a three-litre V6 turbo with an output of 340 PS, while the Cayenne Turbo S E-Hybrid (RRP £126,690) features a four-litre V8 twin-turbocharged engine with 550 PS, giving a total system power output of 680 PS. Combined WLTP fuel consumption for the Cayenne Turbo S E-Hybrid models is 68 to 74 mpg – pretty good.
Porsche sales resilience this year will be due to many things: a highly aspirational brand, attractive new models such as the Cayman GTS 4.0, a bit more disposable income around for core buyers and perhaps also its usual lead times. Most cars are ordered well in advance and built to spec, so there is some protection from cars ordered ahead of the full effect of the pandemic, but the manufacturer must also get some credit for shifting its product mix as part of Strategy 2025: Porsche’s plan to have half of its sales as electrified vehicles by 2025.
Porsche Profits 2020
The recent financial results from Stuttgart show that, on revenue of €19.4 billion from January to September 2020, Porsche recorded a profit of €2 billion: a 10.4% return on sales.
While this was almost 30% down on last year, things could have been worse and they know it. “Our young, attractive product portfolio appeals to customers,” said Porsche Chairman, Oliver Blume. “I’m optimistic about the coming months. The new 911 and our electric sports car, the Taycan, impressively demonstrate our innovative strength, and their sales figures have exceeded our expectations.”
Some 11,000 Taycans were delivered during the first three quarters of 2020, but more impressively (if such things impress old-school Porsche fans), Porsche delivered more than 190,000 vehicles to the end of Q3. China remained the biggest market, taking 62,823 vehicles to the end of September: a full third of all global deliveries. We will see how things pan out across the remainder of the year.
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