New car registrations in the UK fell 89% year-on-year in May, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).
Some 20,247 cars were registered in the month, with click-and-collect services enabling some movement in the market. However, with 163,477 fewer registrations than in the same month last year, the performance still marked the lowest May since 1952.
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Private buyers accounted for the lion’s share of registrations at 63.7% of the market, equivalent to 12,900 units, while 6,638 cars went to fleets. There were severe declines across all segments and fuel types, apart from battery electric vehicles, with 429 more units registered year-on-year in this exceptional month as pre-orders of the latest premium models were delivered to customers.
The overall market is now down 51.4% in the first five months of 2020, at just over half a million registrations compared with more than one million at this point last year. The news comes in the week that car showrooms in England were given the green light to re-open following more than two months of lost trading. In Scotland, Wales and Northern Ireland (until next week), however, car showrooms remain closed.
Mike Hawes, chief executive of the SMMT, said: “After a second month of shutdown and the inevitable yet devastating impact on the market, this week’s re-opening of dealerships is a pivotal moment for the entire industry and the thousands of people whose jobs depend on it. Customers keen to trade up into the latest, cutting-edge new cars are now able to return to showrooms and early reports suggest there is good business given the circumstances, although it is far too early to tell how demand will pan out over the coming weeks and months.
“Restarting this market is a crucial first step in driving the recovery of Britain’s critical car manufacturers and supply chain, and to supporting the wider economy. Ensuring people have the confidence to invest in the latest vehicles will not only help them get on the move safely, but these new models will also help address some of the environmental challenges the UK faces in the long term.”
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Sue Robinson, director of the National Franchised Dealers Association (NFDA), said: “Franchised retailers are taking robust precautions and have implemented stringent measures to ensure the health of staff and customers which is the top priority. There are attractive offers on new and used cars consumers can benefit from over the next weeks and retailers have reported positive figures from the first days back in business.
“As Governments across the EU have stepped in to support the automotive sector, it is important that also the UK Government consider how to best assist the UK automotive industry, which is one of the pillars of the UK economy and employs in total over 800,000 people.”
Seán Kemple, director of sales at Close Brothers Motor Finance, commented: “The huge release of pent-up demand from the past few months will boost the market in the short-term, giving the industry time to work toward longer-term recovery.
“Dealers must be prepared for consumers to be more careful and to ask questions around the safe handling of their new vehicle. In this environment, many may want to show that they are following Government guidelines and putting the necessary protections in place. The car market will return to strength, but it will be crucial to keep a watching brief on the changing regulations and buying trends.”
James Fairclough, chief executive of AA Cars, said: “There are encouraging signs for the industry that latent demand has been building during the lockdown period and boosted by people who usually commute by public transport, now considering the purchase of a car.
“In the last few weeks we have seen a really positive shift in consumer interest on the AA Cars platform, with a 71% month-on-month increase in views of used cars for sale. We’ve also seen requests for car finance jump by 134% compared to April, suggesting that interest is translating into intent to purchase. These are the glimmers of hope to be optimistic about.”
Karen Hilton, chief commercial officer at heycar, said: “There are loud calls for stimulus to drive the industry – such as scrappage schemes – as we move out of lockdown. To help guide customer confidence, it would be helpful if the government set out its position on future support for the industry. However, it will take time to agree the detail of this, which doesn’t help customers who want a car now or dealers who want to sell cars now.
“Those looking for new, factory built, vehicles are likely to face long delays with Ford quoting 22-week lead times on a new Focus and 18 weeks on a Fiesta. If customers are looking for a brand new car, they could be waiting for six months.
“This places the used market as a really attractive option right now for dealers and motorists, where the stock of nearly new and pre-registered cars is strong and much more likely to give the industry the quick shot in the arm that it needs.”
Michael Woodward, UK automotive lead, Deloitte, said: “Prior to COVID-19 fleet sales far outstripped private sales, but this month private sales made up 64% of total sales. An uptick in business confidence will hopefully see companies invest in their car fleets again and return sales to pre-COVID levels.
“Despite the optimism, there is still uncertainty around consumer behaviour; the economic uncertainty caused by the pandemic may cause people to think twice about making major purchases at this time.
“During the previous economic downturn most European countries brought out scrappage schemes to boost sales. The majority of manufacturers will be offering big incentives to support early sales, but if the buying public believe there are further incentives to be had, this could stall vehicle purchases in June.”
