UNSURPRISINGLY new car sales plummeted in March as the Covid-19 pandemic took hold, down 44.4% to 254,684 vehicles.
However, one piece of positive news was that sales of battery electric vehicles jumped almost 200% while plug-in hybrids rose 38% according to the latest figures from the SMMT.
This increase reflects changes to company car tax which came into effect at the beginning of April.
Ian Johnston, Chief Executive of Engenie said: “The elimination of benefit in kind tax for electric vehicles marks a significant milestone in the journey towards mass adoption. It now makes complete financial sense for millions of drivers across the UK to go electric.
“Not only will this directly increase the numbers of electric vehicles on the road today, it will also give a huge boost to the all-important second hand electric vehicle market, building momentum for wider electric vehicle adoption in two to three years’ time.”
Sue Robinson, Director of the National Franchised Dealers Association, said: “The majority of franchised dealerships’ showrooms were closed for a week or longer in the second half of March which is when a large percentage of new cars are registered. As a result, the decline in new car sales does not come as a surprise.
“NFDA is working closely with franchised retailers and industry partners to mitigate the effect of COVID-19 through lobbying the Government for support on issues such as the inclusion of commissions in the Job Retention Scheme, workshop opening for key workers, MOT exemption and FCA fees for motor retailers.
“Franchised retailers continue to work hard to assess the issues currently affecting them as they continue to prioritise the health of their staff and customers.
“We remain hopeful that the market will recover and franchised retailers will be able to continue their support for consumers on their vehicle purchasing and servicing needs.”
The Government’s Job Retention Scheme was launched to assist all UK employers to access support to continue paying part of their employees’ salary for those employees that would otherwise be laid off during the Coronavirus outbreak.
The Government has announced further details on the scheme:
- Dealers can claim for any regular payments they are obliged to pay their employees. This includes wages, past overtime, fees and compulsory commission payments.
- Both the Apprenticeship Levy and Student Loans should continue to be paid as usual as the grants from the scheme do not cover these.
- Any employees that dealers place on furlough must be furloughed for a minimum period of three consecutive weeks. Employees can be furloughed multiple times, but each separate instance must be for a minimum period of three consecutive weeks.
- If contractually allowed, employees can work for another employer whilst the dealer has placed them on furlough.
Robinson added, “NFDA has repeatedly highlighted to the Treasury how critical it is to include commissions and bonuses in the scheme as the majority of people employed in the automotive sector rely on these regular earnings in addition to their basic salary.
“It is encouraging to see that the Government is listening to our concerns and taking action to support businesses and the thousands of people employed in our sector”.