The sector was being disrupted by new technologies, including automation, electrification, connectivity, and artificial intelligence. Meanwhile, growing environmental concerns, changing customer preferences, and the growth of shared mobility were altering long-standing demand patterns. OEMs faced intense financial pressure because of declining sales, higher R&D costs, and increased tariffs. Globally, OEM profit margins had decreased from 6 percent in 2018 to 3 percent in early 2020.
COVID-19 Will Have An Impact On The UK Mobility Sector For More Than Two Years
While the UK mobility sector was experiencing strong growth, the automotive market was lagging. UK sales of new and used vehicles peaked at 10.8 million units in 2017 and have since been dropping by about 4 percent annually. This shift partly resulted from several country-specific transportation trends that were changing attitudes to vehicle ownership before COVID-19. In the part of Central London where private vehicles face a congestion charge, traffic has fallen 30 percent since 2007. In 2019, the creation of the ultralow-emission zone in Central London reduced the number of vehicles driving in the city on a typical day during congestion-charge hours by 13 percent from 2017.
While the recent decline in sales was obviously concerning, COVID-19 has dealt a far greater blow than any force in recent memory. Year-on-year new car sales in the United Kingdom were down 46 percent in March 2020 and 97 percent in April 2020. If economic troubles persist, UK automotive sales could continue to languish.
The survey also reveals that walking and cycling might become potential “winners.” While 62 percent of respondents frequently used these forms of transit before COVID-19, 71 percent expect to do so in the next normal. Meanwhile, other transportation modes (private cars, public transport, car-sharing, ride-hailing) will remain broadly flat. New bicycle sales were also double the normal level for May. The preference for active transport may continue, especially since the government recently created a £2 billion program designed to encourage cycling and walking, partly by increasing bike lanes and making other infrastructure improvements.
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