New car registrations down 35 per cent as one in five dealerships remain closed

Published 06 July 2020

New car registrations fell by a third in June, with one in five dealerships remaining closed due to the Covid-19 coronavirus pandemic, according to new data from the Society of Motor Manufacturers and Traders (SMMT).

Car showrooms were given the green light to reopen in England on 1 June, while dealers in Wales and Scotland had to wait until the end of the month. Official data from the SMMT show that 145,377 new cars were registered in the UK during the month - 78,044 fewer than June 2019. 

>>> Scotland's car dealers reopen after 14 weeks in lockdown

The SMMT figures are a clear improvement on the 89 per cent decline in May but provide a strong indication that trading conditions will be tough for the remainder of 2020, with research showing that many car buyers are planning to delay their next purchase.

AA Financial Services surveyed 2131 car buyers in June and found that 38 per cent had decided to delay buying their next car until the virus is under control, while 16 per cent said they had decided to buy a used car rather than a new model. Just 33 per cent said the coronavirus hadn't impacted their car buying plans.

Dealership

The SMMT figures show that the new car market is almost 50 per cent behind the same period last year, with 616,000 fewer new cars being sold over the first six months of 2020. This has resulted in an estimated £1.1 billion loss to the Treasury in VAT receipts - figures that have prompted market commentators to renew their calls for a scrappage scheme.  

“July figures will probably give us a clearer idea where consumer confidence and appetite to buy is right now. By that time, any pent-up demand for new vehicles will have dissipated, enabling us to see where we really are," said Alex Buttle, director of car selling comparison website Motorway.co.uk.

>>> Coronavirus: How to buy a car after the lockdown

“The worry is that in the current economic climate, with many people unsure about their jobs when they come off furlough, the new car market will be slow to return to a sense of normality, without any meaningful incentives from the Government to turbo-charge growth."

The Government is reportedly considering an EV scrappage scheme to boost the UK automotive market, with car buyers being offered £6000 to trade-in their old car for a new electric vehicle (EV). The 2009 Government-backed scrappage scheme cost £300 million, with buyers getting up to £2000 off the price of a new car.

Comments

Pug RCZ    on 6 July 2020

Scrappage for Electric vehicles. Same old story but getting worse.

Those who can afford relatively expensive electric vehicles are already subsidised by the tax payer to the tune of up to £3000 in the form of a grant.. So those who pay tax, but can't afford one, help pay the grant for better off purchasers. As a Social Care Worker (think "key worker") on the huge rate of pay of £9.05 an hour AND a tax payer, I would willingly pay even more tax to help the rich to drive a car I can't afford.

Thank you and you're welcome.

Edited by Pug RCZ on 06/07/2020 at 23:36

David Milton Keynes    on 7 July 2020

The government should only offer insentives on car scrappage schemes if the manufacturer produces vehicles in the uk .why subsidise other countries car production.. the UK government should look at the possibility of a joint venture with the likes of Kia to manufacture in this country... David . Milton Keynes

conman    on 7 July 2020

Can't agree with the last comment enough, The government is putting the final nails into the UK car industry.

Why should we the British taxpayer subsidise the EU car makers like VW, BMW, PSA, Seat,the list goes on and as we produce virtually no EV vehicles in the UK, this will be the death of Nissan, Vauxhall, Toyota car industry here. The government should only give the subsidy to vehicles that are produced in the UK even to ICE vehicles because as I said the death of the ICE vehicle is the death of the car industry in the UK. The Government should be in talks with Kia, Hyundia, Honda, Suzuki even Nissan (even though they are partners with Renault) and discuss plans for them to take over the factories in Sunderland and Ellesmere Port when the owners pull the plug and it will come. The government had a chance with Tesla but blew it, now the Giga Factory is being built in Germany with 4-6000 high paid skilled jobs. In reality you could not make this up.

It seems the policy of our government is subsidise everyone else but don't support your own country. Throw billions in the kitty but produce nothing. Why can't OUR government run businesses, like railways, electricity companies, water companies so that the profits either go in the countries coffers or get reinvested, not into a foreign countries shareholders pockets. A perfect example is the M6 Toll road owned by Australians in the contract the Government forgot to put a price cap on the toll so they can charge what they want and as they have lost money virtually ever year the price keeps going up so less use it. The Government should make a VERY sensible bid on it vastly reduce the toll and then it would pay for itself.

jchinuk    on 7 July 2020

Surely the incentives (or otherwise) for EVs are a red herring.

People are uncertain about their jobs and short-term futures, the "furlough" scheme has been described as "people made redundant, they just don't know it yet". Until most people are settled and back to "normal" (probably not till next year and after we all have had a vaccination), there will be sluggishness in the purchases of all big-ticket items.

I find the talk of EVs priced at North of £30K mildly amusing when the questions to this page regularly ask about "a good car under £1000". My first car was a seven-year-old Cortina at £1250 40 years ago, I think prices have risen since then.

simon witham    on 7 July 2020



I agree people are uncertain about there jobs and it will make anyone consider about making bigger purchases and yes i am one of them.Also people are avoiding new car purchases because of the initial
loss you make when just driving your new car out of the showrooms, 3/4 month old car saves you loads of money with quite often little mileage on the car.

I must say tho i dont always think the dealerships do them selves any favours somtimes some of the new cars looming hyundia etc.. all gone up by 2/3 k on average on thier budget cars.
if you think there also infinity schemes available and my son was able to use this to purchase a new car and save around 2k it saids to me there is help out there and options available.

If there saying 38% of customers are holding back well lets see the dealerships do some sensible sales
and be more realistic with there profits they are trying to make at the moment. Also what everyone seems to forget that most dealerships have sevice/ parts departments for 2nd hand cars and also to support other garage services around the country to help maintain thier own brand of cars they make
good money out of this.

   on 7 July 2020

Yea, like THE DARTFORD RIVER CROSSING ,I.e. the QE2 BRIDGE, when it recuperate its build cost, it will be free to use, what a joke, and I believe it's operated by a French company. This country doesn't invest in anything that will benefit this country.

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