UK new car registrations down 34.9% in June
New SMMT figures mark a stark increase over May, but some 240,000 sales have been lost during the pandemic
Latest figures from the SMMT show that new car registrations were down 34.9% year-on-year in June as one in five dealerships remained shut in the wake of the coronavirus pandemic.
The body notes that, although the 145,377 registrations recorded in June were substantially less than the same period last year, they were a marked improvement on May, when the year-on-year decline was 89.0%.
Car dealerships in England were allowed to re-open on 1 June, allowing the retail sector to gradually restart operations, but roughly one fifth have remained closed according to the National Franchised Dealers Association, and dealerships in Wales and Scotland were only allowed to open at the end of the month.
The latest decline means the market is 616,000 units - 48.5% - down compared to the first six months of 2019. The SMMT said that roughly 240,000 private sales have been lost since the government’s ‘stay-at-home’ directive was implemented in late March, “resulting in an estimated £1.1 billion loss to the Treasury in VAT receipts alone”.
Private sales were down 19.2%, with orders made before lockdown accounting for 72,827 registrations, roughly half of the total for June. Fleet sales were worse affected, falling by 45.2% to 69,398 units.
The SMMT said there remains a degree of uncertainty as to the level of demand for new cars in the UK as not all dealerships are open, but it predicts that “automotive is likely to lag behind other retail sectors”, because consumers are less likely to make large expenditures as the country emerges from lockdown.
Mike Hawes, SMMT chief executive, said: “While it’s welcome to see demand rise above the rock-bottom levels we saw during lockdown, this is not a recovery and barely a restart. Many of June’s registrations could be attributed to customers finally being able to collect their pre-pandemic orders, and appetite for significant spending remains questionable.
“The government must boost the economy, help customers feel safer in their jobs and in their spending and give businesses the confidence to invest in their fleets. Otherwise it runs the risk of losing billions more in revenue from this critical sector at a time when the public purse needs it more than ever.”
Last month, the SMMT warned that one in six UK automotive jobs were under threat following a wave of job losses at various large firms including Aston Martin, Bentley and McLaren. The body is calling on the government to provide an industry support package to drive demand and ease cashflow, with suggested measures including emergency funding, business rate holidays, VAT cuts and policies that boost consumer confidence.
Earlier reports that the government was planning to introduce a nationwide scrappage scheme - boosting demand for new electric and hybrid cars by offering consumers up to £6000 for older models - have been described as ‘unlikely’ by a government source.
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