8 July 2020
UK new car market down a third as tentative restart reveals subdued demand
UK new car registrations fell -34.9% in June, according to figures published today by the Society of Motor Manufacturers and Traders (SMMT) as the market began a tentative restart after more than two months of lockdown.
The drop was an improvement on May but, with 145,377 new cars registrations, this still represented a significant decline of 78,044 compared with June 2019, as dealerships in Wales and Scotland remained closed for much of the month.
The lacklustre performance means that the market is almost 616,000 units, or -48.5%, behind the same period last year, with some 240,000 private sales lost since consumers were told to ‘stay at home’ and retailers forced to close, resulting in an estimated £1.1 billion loss to the Treasury in VAT receipts alone.
Private demand proved more resilient than business, down -19.2% in June with orders made pre-lockdown resulting in 72,827 registrations and accounting for more than half of the market. Fleet sales fell by a very substantial -45.2% to 69,498 units as businesses paused purchasing amid expenditure reviews.
With one in five showrooms in England remaining shut throughout June, and those in Wales and Scotland unable to open until the end of the month, there remains some uncertainty regarding the true level of demand. The hoped-for release of pent-up sales has not yet occurred, with consumer confidence for big ticket purchases looking weak meaning that automotive is likely to lag behind other retail sectors.
As the wider retail and hospitality sectors re-open and society and the economy begin a gradual return to normality, the true picture of consumer confidence is likely to emerge. However, concerns remain with the government’s Coronavirus Jobs Retention Scheme winding down and major employers across all sectors announcing significant job losses. The subsequent effect on livelihoods as well as on business and consumer confidence will not help a depressed market.
As part of the largest independent dealer group in Europe, Arnold Clark, we have access to a wide variety of dealerships that can supply your next new car or van. Give us a call on 01908 288400.