New car demand down by over a third in June
But June’s 34.9% decline is an marked improvement on figures for April and May...
Nearly 616,000 fewer new cars were sold in the first half of 2020 compared to last year – although demand in June notched a much-needed uptick.
While new registrations were down 34.9% year-on-year, June’s figure signals a vast improvement on the 97.3% decline recorded in April, and 89.0% from May – as showrooms began to reopen their doors.
The Society of Motor Manufacturers and Traders (SMMT), which released the latest figures, says the economic uncertainty and lack of financial confidence underpinning the numbers mean it’s far too early to call the rebound “a recovery”.
Huge dip in demand
Compared to June 2019 when 223,421 new cars were sold, the 145,377 monthly registrations notched this year represent a major downturn.
With dealerships in Wales and Scotland remaining closed for much of the month due to the coronavirus lockdown, the already sluggish figures took a further significant hit.
Data from the latest comparethemarket.com Household Financial Confidence Tracker suggests almost 40% of UK households have struggled financially in the wake of the pandemic – with most believing it could take up to nine months for things to get back on an even keel.
Dan Hutson, head of motor insurance at comparethemarket.com said: “While there has been a slight uptick in demand with showrooms now open, it’s not the jumpstart some of the car industry would have hoped for.
“Many people will be putting off buying a new car until absolutely necessary. Our Financial Confidence Tracker shows that nearly four in ten (38%) households feel that their finances have suffered since the beginning of lockdown and it will take some time for this confidence to recover.
“We expect that the easing of lockdown restrictions will see a slow and steady return to demand.”
‘Barely a restart’
SMMT chief executive Mike Hawes 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.”