The UK motor trade had an exceedingly difficult April as far as new and used car sales go. The sales of new car registrations from the same period last year dropped by 97 per cent after lockdown measures were introduced to protect the public from covid19.
Motor trade figures recently released show the industry produced the lowest sales figures for over 70 years, with just over 4,000 new cars registered in April.
Seventy per cent of those new sales were companies adding to their fleets and would have been bought directly from wholesalers or manufacturers pre-ordered before the crisis began.
New and used car dealerships have remained closed during lockdown to help contain the spread of Coronavirus, bringing a halt to the car industry even though some deliveries are taking place.
Auto Trader’s commercial director, Ian Plummer said: “With retailers forced to close the doors to their physical forecourts, it’ll come as no surprise to anyone to see just how dramatic an impact it’s had on the new car market. “Some brands have been able to sell remotely, but uncertainty in the government’s guidelines or a lack of the required infrastructure to operate home delivery in a safe way, has limited it to all but a handful of retailers.”
Mike Hawes, The Society for Motor Manufacturers and Traders (SMMT) chief executive said, “If you are told to close all your car showrooms for the entirety of April it’s no surprise sales are almost non-existent.
These figures, however, still make for exceptionally grim reading, not least for the hundreds of thousands of people whose livelihoods depend on the sector.”
Even though some motor trade sectors continued to work during lockdown, like motor trade insurance policy providers for example, some car manufacturers including Aston Martin, Land Rover and Jaguar have only just started production lines again.
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The challenge for the whole industry now is keeping their workers safe and socially distanced while producing the volumes required.
Mr Hawes (SMMT) said, “Manufacturers are trying to figure out how to start operations in a safe environment, but it will be slow, and production will be ramped up very slowly.”
The motor trade industry has navigated several difficult challenges in recent years, emission scandals, falling sales, drop in demand for diesel vehicles, and meeting tough new emissions targets.
This time dealerships had to close their doors back in March, traditionally one of their strongest months of the year for new car sales. Hopefully, once the restrictions are eased and showrooms start welcoming customers back; there will be several initiatives launched, like new and used car scrappage schemes to create a surge in demand.
Close Brothers Motor Finance Director of sales, Sean Kemple, said “When the lockdown does begin to lift, we should see pent-up demand released, triggering a sharp rise in sales of the cars sitting in showrooms; we’ve already seen this in the European used car market as dealers review and reprice their stock after lockdown.
But after an inevitable uplift, the future is less certain. We might start to see supply issues, held up by restrictions on manufacturing and the stalling of overseas shipment. In the longer-term, demand trends may change.”