Monday 6 July 2020 9:52 am

UK car sales sink 35 per cent in June despite post-lockdown restart

UK new car sales plunged a third in June despite the easing of lockdown measures, new data showed today, after worse falls in April and May.

New car registrations sank 34.9 per cent in June year on year, according to the Society of Motor Manufacturers and Traders (SMMT).

But that marked what the body called a “tentative restart” after May saw sales plummet 89 per cent.

Read more: SMMT: UK car production falls 10 times worse than Brexit drops

Still, the 145,377 new UK car sales meant June saw 78,044 fewer car sales than in June 2019. And year-to-date sales are almost half of last year’s level, with just 653,502 new cars hitting UK roads up to June.

“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,” SMMT chief executive Mike Hawes said.

“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.”   

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The SMMT warned almost 250,000 private UK car sales have been lost due to lockdown, costing the Treasury £1.1bn in VAT. Private demand was only down a comparatively low 19.2 per cent in June, due to the delivery of pre-lockdown orders. 

But the body warned of continued uncertainty as one in five showrooms in England remaining shut through early June and those in Wales and Scotland not opening until July.

It blamed weak consumer confidence for big ticket purchases, adding that the automotive industry may recover more slowly than other sectors.

SMMT boss Hawes pushed Boris Johnson’s cabinet to bolster a wide UK economic recovery.

“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,” he said. “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.”   

Karen Johnson, head of retail & wholesale at Barclays Corporate Banking, said: the data shows “the scale of the challenge facing car dealerships”.

Read more: FCA to extend coronavirus relief for car finance and high-cost credit

“Dealers will now hope that there is a wave of consumer confidence coming down the line, as restrictions on public life begin to be lifted,” she added. But she said coronavirus may encourage more people to use cars.

“Further questions arise around how changing patterns in working environments and consumer attitudes might impact on UK car sales. On the one hand, many people are working from home and so don’t need a car to get themselves to work every day. Yet on the other hand, people are being advised to stay away from public transport and so may well need their own vehicle to simply get them from A to B.”

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