AS expected, new car registrations in the UK during May, dropped dramatically, down almost 90%. But as showrooms reopen sales are expected to pick up quickly to meet pent up demand.
Latest figures from the SMMT show that 20,247 cars were registered in the month, as ‘click and collect’ services, allowed from mid-month, saw some movement in the market.
However, with 163,477 fewer registrations than in the same month last year, the performance still marked the lowest May since 1952.
Private buyers accounted for the lion’s share of registrations at 63.7% of the market, equivalent to 12,900 units, while 6,638 cars went to fleets.
There were severe declines across all segments and fuel types, apart from battery electric vehicles, with 429 more units registered year on year in this exceptional month as pre-orders of the latest premium models were delivered to customers.
The overall market is now down 51.4% in the first five months of 2020, at just over half a million registrations compared with more than one million at this point last year.
While car showrooms in England were given the green light to re-open following more than two months of lost trading. In Scotland, Wales and Northern Ireland (until next week), however, car showrooms remain closed.
Mike Hawes, SMMT Chief Executive, said: “After a second month of shutdown and the inevitable yet devastating impact on the market, this week’s re-opening of dealerships is a pivotal moment for the entire industry and the thousands of people whose jobs depend on it.
“Customers keen to trade up into the latest, cutting-edge new cars are now able to return to showrooms and early reports suggest there is good business given the circumstances, although it is far too early to tell how demand will pan out over the coming weeks and months.
“Restarting this market is a crucial first step in driving the recovery of Britain’s critical car manufacturers and supply chain, and to supporting the wider economy.
“Ensuring people have the confidence to invest in the latest vehicles will not only help them get on the move safely, but these new models will also help address some of the environmental challenges the UK faces in the long term.”
Sue Robinson, Director of the National Franchised Dealers Association (NFDA), said that franchised retailers are taking robust precautions and have implemented stringent measures to ensure the health of staff and customers which is the top priority.
She added: “There are attractive offers on new and used cars consumers can benefit from over the next weeks and retailers have reported positive figures from the first days back in business.
“As Governments across the EU have stepped in to support the automotive sector, it is important that also the UK Government consider how to best assist the UK automotive industry, which is one of the pillars of the UK economy and employs in total over 800,000 people”.
Andrew Burn, Partner and Head of Automotive at KPMG, said that year-on-year reductions are broadly in line with those seen in Europe at a comparable time during the COVID-19 lockdowns.
He added: “In reality, all eyes should be on June’s results as this data will give us a greater indication of the speed at which the UK’s car market could return to healthier levels.
“As we start to see more data, it will become more evident whether consumer demand has changed, as it is currently too soon to tell.
“What will also be telling is whether consumers see lead times as having greater importance in their buying decisions, or whether COVID-19 has driven a change in consumer behaviour, with more leaning towards less expensive, more economical cars.
“What is worthy of note is that electric vehicles and alternative fuel vehicles have faired better in these results. However, this may be due to pre COVID-19 orders being fulfilled as typically lead times for these vehicles are longer.”
With new car sales stalling, the fleet service, maintenance and repair (SMR) is now back up to 60% of pre-coronavirus levels, reports epyx.
The company is basing this assessment on usage of its 1link Service Network, which is used by fleets totalling four million vehicles to manage their SMR processes.
Tim Meadows, vice president and commercial director at epyx, said: “In April, soon after lockdown, the number of raised through the platform, which essentially represents the number of separate SMR transactions, fell as low as 18% of the average pre-coronavirus levels we had seen in February.
“Now, we are seeing definite signs of momentum with a noticeable increase in numbers every day. There is a definite feeling that fleets are getting back to work on quite a widespread basis.
“Obviously, some parts of the fleet industry became completely inactive during lockdown but the platform plays an important part in supporting key workers, so we co-ordinated with our SMR providers to ensure there were sufficient outlets open to meet their needs.
“Today, those essential fleets are still in action but they are being joined by a wider range of businesses and other organisations who are at the leading edge of a more concerted return to work.”
Meadows said that epyx was encountering some evidence that SMR issues were arising with vehicles as they returned to use and that fleet managers and drivers needed to take care.
“We’re hearing stories of the kinds of issues you would expect – flat tyres and flat batteries, for example – but also some more serious component failures. There is a risk management argument for cars and vans to be properly inspected by a technician before re-entering service if they have been parked up and unused for a while.”