How COVID-19 affected the demand for vehicles in Malta

It’s safe to say that COVID-19 has significantly changed every aspect of our lives. One key change was the substantial lack of necessity to travel around, as many people worked from home and shifted to online shopping. We’ve all been there. Late afternoon, mobile in hand, browsing through the latest burger or pizza offers for delivery.

A recent Central Bank Policy Note seen by confirms a sharp pickup in the number of people resorting to food deliveries. Using Google-mobility data, this research indicates that even when restrictions were eased, transit towards workplaces was a quarter below pre-pandemic levels.

This development brought a few positive consequences. Road traffic accidents in 2020 were, in fact, a quarter below the 2019 level. Similarly, pollution levels fell by more than half in some months in places like Msida.

As with everything else COVID related, there’s always a negative side. Official data indicates that firms engaged in motor trade had a tough year, with employment by the end of 2020 Q4 down by 2% over the previous year. Moreover, we have seen a decline in the hours worked even for those who remained in their jobs, except for those working in accommodation and food services.

Data issued recently by the National Statistics Office can help shed light on how COVID-19 affected the demand for vehicles in Malta. While in the first quarter of 2021, the stock of licensed motor vehicles was nearly 1,900 higher than in the previous quarter, the average daily change in the stock of licensed motor vehicles was well below pre-pandemic levels. This, combined with the fact that population growth continued unabated during the pandemic, meant that the number of vehicles per head in Malta has fallen to levels last observed in 2014. Whereas in the peak year of 2018 there were 81 vehicles per every 100 resident, in 2020 there were 78.

“The number of vehicles per head in Malta has fallen to levels last observed in 2014.”

If one looks at passenger cars, the drop in 2020 is even starker. In fact, there were 58 cars for every 100 residents in 2020, which is the lowest ratio on record since 2011, or nearly a decade earlier. The number of newly registered cars over the last four consecutive quarters stood at less than 4,400. At its peak, around mid-2019, the four-quarter sum was nearly double, at close to 8,300. The decline in second-hand cars, shown in the chart as “new” used cars, is less stark, with new registrations down by two-thirds compared to their peak in 2018. Second-hand cars appear to be gaining market share, though this may predate the pandemic.

Despite the growth in deliveries and online shopping, the registration of goods-carrying vehicles also declined substantially during the pandemic. In this sector, the market is much more dominated by second-hand vehicles. The decline in registrations of this market segment is less pronounced than that observed for passenger cars. So much so that whereas the number of goods-carrying vehicles per 100 residents fell slightly to 9.9, from 10 a year earlier. Still, this marked an inversion of trend compared to previous developments.

The one segment of the motor vehicle market that emerged relatively unscathed from the pandemic were motorcycles. While there was a slight decline in the number of new registrations, these still compared well with those observed pre-pandemic. The market here is increasingly becoming dominated by new vehicles, with the second-hand market declining substantially. Moreover, the number of bikes per 100 residents rose to over 6, the highest on record. This could partly reflect the strong growth of takeaway delivery firms during the pandemic and a shift from firms using cars or vans for deliveries to using motorcycles.

A leading statistician speaking to said that the trends seen in recent months need to be studied carefully as they indicate that the country may need to shift focus in infrastructural spending. “These trends are also crucial in light of plans on carbon neutrality. It might be a bit too early to judge whether the dominance of the private car has permanently reversed trend. For instance, reliance on used cars may indicate the potential challenge of weaning households off fossil-fuel cars, while the shift from vans to motorcycles has implications on possible incentives required so that private firms electrify their fleet.”

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