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Car dealers closing as new car sales plummet

Published 05 November 2019

The number of new cars registered on UK roads has dropped for the eighth month in a row as dealers close doors and warn of 'ongoing market challenges'.

In total, 143,251 new cars were registered in October 2019 - a drop of 6.7 per cent compared to the same period last year. Meanwhile, sales are down by 2.9 per cent year-to-date, with experts blaming ongoing uncertainty around Brexit and legislation around petrol and diesel cars.

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Lookers, one of Britain's biggest car dealership chains, issued a profits alert last week, as two of its senior executives announced they would be leaving the firm. The brand said it expected to see pre-tax profits of approximately £20 million in 2019, down from £67.3 million in 2018.

It also announced plans to 'accelerate its portfolio consolidation', identifying 15 individual dealerships for closure. All but two of these dealerships are expected to be closed by the end of the year.

It follows car dealership firm Pendragon, which recently announced plans to close 22 of its 34 Car Store sites.

Most car manufacturers saw a drop in registrations last month, with niche manufacturers like Alpine, Bentley, DS, Lexus and Porsche bucking the trend. Out of the mainstream brands, MINI, Renault and Vauxhall were all hit the hardest - each losing more than a third of sales compared to the same period last year.

Out of all the fuel types, registrations of diesel cars dropped the most - with sales dropping off by 28.3 per cent, down to 34,666 in October. Registrations of battery electric vehicles rocketed by 151.8 per cent - although they still continue to account for just 2.2 per cent of the market share, with 3162 new EVs on the roads last month.

“The UK car industry will surely look back at 2019 as one of its gloomiest on record," said Alex Buttle, director of car selling comparison website Motorway.co.uk. "It’s unlikely new car sales are going to pick-up materially before the end of the year, with consumers also now having a General Election to get their heads around.

"Businesses across the industry will be praying for a decisive outcome on December 12th, and a chance to kick-off 2020 with renewed optimism.

"Stability needs to be restored to the market, and agreeing a positive future relationship with the EU is crucial to avoid punitive tariffs and barriers that could lead to higher prices and less retail choices for consumers."

Comments

gavsmit    on 6 November 2019

Declining sales are down to the horrendously high prices of cars these days.

With a new wave of superminis about to be launched with list prices beginning from not too far off £20k, no wonder people aren't replacing their cars as often as they used to.

Just imagine the depreciation hit on something like a £25k mainstream Focus size hatchback?! You might as well put a few thousand pounds on your Guy Fawkes bonfire!

I show people I know, who aren't car enthusiasts, the list prices of new cars these days and they can't believe it - and end up saving for a house extension or house move rather than replacing their old car.

Sure, you could go the finance route, but that still involves a lot of money to ultimately end up with nothing, if you decide not to pay an additional huge amount of money to keep the car. You're also constantly worrying about the condition of the car to avoid additional, unrealistic, costs come the time to give it back too.

I've had my current car for almost 5 years now (the longest I've kept a car for) and will be keeping it for as long as I can as estimated prices for it's replacement model due next year will be around 50% more than what I paid for my one!

And that's such a shame for someone like me who's so interested in cars.

daveyjp    on 6 November 2019

My dad is on his second Honda, but it may well be his last due to access to dealers.

He used an excellent family dealer to buy and service his car under service plans. They closed last year.

He then went to the next nearest, but large franchise dealer for the service earlier this year. He was informed at the weekend they are changing franchise and will no longer deal with Hondas under the servicing plan.

I have noticed on my travels more and more unused areas of land being used for car storage. I was at a company last week and noticed a hidden away area of yard stacked with row after row of new Toyotas.


Marcus T.    3 days ago

Honda Bracknell, where I purchased my current CRV has closed. Many more are closing, leaving fewer dealerships within a reasonable distance.

Peter Hobbs    6 days ago

I think you have hit the nail on the head here, my fiesta is 4 years old but I will be keeping it for the foreseeable future Just paid off the 4 years interest free so normally I would be looking for a replacement. The manufacturers have only themselves to blame for being too greedy.

Geoff Rothon    6 days ago

My wife and I both run almost classic Citroens on a daily basis.(Xantia and BX TZD Estates) Both were cheap to buy and as economical as some modern day 'tanks'. Cars are much too big for the UK roads these days, and don't do anything for us in terms of economy and (lack of)style.I bought my house for less than the price of one of these cars,and I know I will get a good return on my investment,whereas I would lose thousands in a few short years if I bought a new car.

Howard Buchanan    6 days ago

In real terms and in relation to average earnings, cars are actually cheaper now than ever before. To avoid being hit by depreciation, don't buy new but nearly new with low mileage.

The_Rev    6 days ago

I used to also like to keep my car reasonably current. However I changed and bought an Audi A8 for £20k about 3.5 years ago. It was 3 years old 99,000 miles original price was I think over £65k. It is not cheap to service but it is perfect & economical [ at least on motorways ]

Not sure what typical costs of maintenance are but I would have spent maybe £3k in the last 4 years.
Front brake disks and pads £740

Change 8 speed multitronic transmission oil £650

General service about £600

maybe only £2000 in the 4 years

so pleased with that

victor platt    6 days ago

I have always thought that cars in general were overhyped and some are paying more for their car every month than their house but the only problem is the house generally does not depreciate in value.
I have always bought reliable small cheap to run cars which might not be to everyones taste but at least the money I have saved over the years has enabled me to retire early and have a few nice holidays
Everyone makes their own choice

Brian Bingham    6 days ago

Brian Bingham.

Yes, agree with all, new cars are a ripoff.

With most brands offering 12 year rust warranty, cars will last this amount of time if looked after.

I bought my first car when 21 and am only on my 7th car.
Here’s the list with time held.

1. Ford Escort - held for 2 years ( 4 yrs old when purchased and had to sell at 6 years as was a rust bucket at this age)
2 Morris Marina held for 6 months but was so unreliable had to get rid of it, traded in and made £200 in profit.
3 Bought Datsun (Nissan) Sunny at 6 months old, and kept . At 6 years 6 months had to change because of rust again.
4 Vauxhalll Astra bought at 1 year old and was able to keep for 11 years.
5 Peugeot 405 bought at 3 years old kept for10 years,
6 Ford Mondeo bought at 1 year old and kept for 8 years until engine went at 123000 miles. This was so reliable I bought another.
7. I still have it after 7 years and it will be 14 years old at end of Dec 2019 with 125K miles on it.

Cornish Jimbob    6 days ago

I don't understand why anyone would BUY a new car these days, just lease it. If you want to keep the car after the lease term the finance company will be happy to negotiate a price with you rather than send it to auction and it will be a lot less than a PCP agreement too!

Cornish Jimbob    6 days ago

Personally I would lease a new car rather than buy one.

Howard Buchanan    6 days ago

You can get a good deal leasing something cheap to buy, everyday and unexciting. If you want high end and special, leasing's not so great a deal.

MykiMyk    5 days ago

looks like the car industry is having a re-run from the 1960s into the 1970s.

in the 1960s they built very stylish aspirational vehicles that weren't designed to last, just like the 2010s. the 1970s had the perfect storm for the industry: chronic labour disputes, the fuel crisis and management thinking 10 years+ out of date. now we have the climate crisis, over-priced over-complex expensive to maintain new cars and management thinking again way out of touch.

I can't see any good reason to update my Fiesta until the car industry and our government have a clear path forward with truly affordable EVs and the infrastructure that goes with them and its going to take years.

I'm currently looking at the idea of fitting an aftermarket mild hybrid system as an interim measure

Marcus T.    3 days ago

I agree gavsmit. Many people I know and work with ,wouldn't dream or afford to spend that sort of money on a car. They would perhaps spend £4-5K on secondhand vehicle and as such will not be moving to electric vehicles anytime in the future.

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