Aftermath of COVID-19 put the brakes on the automotive market in 2021

– registrations increased compared to 2020, but we are still far from normal

The coronavirus pandemic slowed down the automotive market last year. The market picked up clearly from the rock-bottom figures of 2020, but the growth in registrations slowed down after the spring. Even though COVID-19’s chokehold on the economy eased markedly over the past year, the availability of components cut production of new cars globally. Customer orders have largely returned to pre-coronavirus levels, but the component shortage and production bottlenecks caused by the pandemic put the brakes on production.

A total of 98,481 new passenger cars were registered in 2021, which is 2.1 per cent more than in 2020. However, this number of registrations is well below the five-year average of around 114,000. 6,526 new passenger cars were registered in December. The figure is 19.8 per cent lower than that of December 2020 and 15.8 per cent lower than the five-year average for December.

A total of 12,893 new vans were registered in 2021, which is 0.4 per cent more than in 2020. 961 vans were first registered in December, which is 29.2 per cent less than in December 2020 and 21.2 per cent less than the five-year average number of registrations in December. The number of van registrations, approximately 13,000 vehicles, is about 10 per cent lower than the long-term average.

A total of 3,536 trucks were new registered last year, which is 3.1 per cent more than in 2020. The number of heavy trucks weighing at least 16 tonnes registered was 2,426 vehicles, which is 4.7 per cent more than in 2020. The number of light trucks weighing under 6 tonnes registered was 886, which is 1.7 per cent more than in 2020. The number of registrations for medium-heavy trucks weighing 6 to 16 tonnes was only 224, which is 7.4 per cent less than in 2020.

A total of 382 new buses were registered in 2021. The number increased by 34.5 per cent compared to 2020, but is still low relative to the long-term average due to the declining demand for bus services caused by the coronavirus situation. Prior to COVID-19, an average of 500 new buses have been registered annually in Finland.

Proliferation of electric vehicles marked the year 2021 in car sales

The fuel revolution is reflected in the rapid proliferation of electric vehicles and various hybrid power lines in first-time registrations. In 2021, the share of fully electric cars of first-time passenger car registrations increased to around 10.3 per cent and that of plug-in hybrids to 20.5 per cent. As recently as 2020, the corresponding shares were 4.4 per cent and 13.7 per cent.

The share of other hybrid power lines that cannot be charged from an external source   increased from around 19 per cent in 2020 to nearly 29 per cent. In 2021, the share of conventional petrol vehicles was around 31.2 per cent and that of diesel vehicles 8.5 per cent. The share of gas vehicles of passenger car registrations fell to just under one per cent last year, while it was still around two per cent in 2020.

In December, a record number of full-electric cars were first registered in Finland, around 24 per cent. Including plug-in hybrids, the share of chargeable vehicles of passenger car registrations increased to around 44 per cent. The number of electric vehicles increased to an exceptionally high level at the end of the year, as vehicle manufacturers have invested particularly in their strategic range, which includes elctric vehicles, during the component shortage.

Busy year in trade-in car sales

The turnover from the retail sales of new passenger cars and vans increased from approximately EUR 4.0 billion in 2020 to approximately EUR 4.3 billion. The increase is due to an increase in sales volume as well as an upsurge in the average price of a new car as a result of the significant increase in the share of chargeable vehicles. The average electric vehicle costs about EUR 20,000 more than the average new petrol car.

The turnover of the sales of used passenger cars and vans in car dealerships increased from approximately EUR 3.6 billion to approximately EUR 3.7 billion, or nearly five per cent. Unlike new vehicles, used car sales were brisk also during the coronavirus year 2020. The year 2021 was even busier at car dealers with regard to the sales of used vehicles. The used passenger car sales of car dealers increased in 2021 to around 321,000 passenger cars from around 306,000 cars in 2020. Around 29,800 used vans were sold by car dealers last year, compared to 28,600 in 2020.

Incentives for low-emission cars drive up demand for plug-in vehicles

The economic outlook remains good for the development of the automotive market, although recent forecasts suggest that next year’s economic growth will be slightly more modest than expected. The component shortage and fluctuations in the raw materials market are expected to continue to affect vehicle production in 2022 as well. According to the automotive industry market forecast, first-time registrations will increase to around 108,000 passenger cars and 14,000 vans in 2022. Even these figures are still below the long-term average.

“Economic growth, employment development and increase in private consumption would support a significantly higher demand forecast, but the component shortage and production disruptions are estimated to slow down the recovery of the automotive market this year as well. The component shortage is expected to ease gradually, but the development of the raw materials market and bottlenecks in supply chains will also be reflected in the automotive industry for a longer period of time than anticipated”, says Managing Director Tero Kallio from the Association of Automobile Industry in Finland.

The new purchase subsidy, which entered into force at the beginning of the year, will stimulate the market for electric vans and trucks, in particular. The earlier purchase subsidy for passenger cars will continue, and a new tax reduction for low-emission company cars will enter into force, complementing the incentive for full-electric company cars that came into force in 2021. The new incentive of EUR 85 per month applies to vehicles with CO2 emissions between 1 and 100 g/km. The abolition of the vehicle tax on electric cars, which entered into force at the beginning of October, will also increase demand for fully electric cars.

“It is also important for the demand for fully electric passenger cars that the EUR 2,000 purchase subsidy for households continues. The uptake of this subsidy has increased clearly in recent months. It is important that a sufficient amount is budgeted for the subsidy so that running out of budget does not slow down the demand for electric cars”, says Managing Director Pekka Rissa from the Finnish Central Organisation for Motor Trades and Repairs.

Further information

Annual statistics of registrations and vehicle fleet, 2021 (pdf, 3.1.2022)

Statistics of new-registrations

New-registrations by fuel type

Pekka Rissa, Managing Director, Finnish Central Organization for Motor Trade and Repairs, Tel. +358 500 417 300, pekka.rissa@akl.fi

Tero Kallio, Managing Director, Association of Automobile Industry in Finland, Tel. +358 40 729 4513, tero.kallio@autotuojat.fi

The Finnish Information Centre of Automobile Sector is a service and information centre providing information of road transport, automobile trade and manufacturing, as well as the car repair and inspection industries and car recycling in Finland. Information Centre is a joint organisation of the Association of Automobile Industry in Finland and Finnish Central Organization for Motor Trades and Repairs.

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