Industry turns to government after sales bombshell

The automotive industry is turning to the UK government for signs of support after figures released today by the Society of Motor Manufacturers and Traders (SMMT) revealed that new car sales had plunged 97% during April – the lowest monthly figure since 1946.

It found that just 4,000 cars were sold during the period, compared to 161,064 in the same month last year, with about 70% of these cars for company fleets and likely to have been ordered before lockdown.

The SMMT is now predicting 1.68 million new UK car registrations in 2020 compared with 2.3 million in 2019.

Industry bodies have been quick to respond, calling for government action to safeguard the industry in the wake of devastating figures following the lockdown.

Sue Robinson, director of the National Franchised Dealers Association (NFDA), said: “As expected, new car registrations were affected by the Covid-19 emergency in April with franchised dealerships’ showrooms closed in line with the government’s guidelines.

“Despite these figures, many franchised dealers continued to deliver after sales service to key workers and the industry is now working hard to enable trading to restart with all necessary measures in place.

“NFDA has been talking to the relevant government departments and manufacturers to ensure work can commence safely for the benefit of dealerships’ staff and customers.

“Over the coming months, it will be vital to evaluate a support package that stimulates the market and ensures the long-term stability of a sector which is key to the UK economy and provides employment to thousands of people.”

Meanwhile, CEO of AA Cars James Fairclough, said: “Between March and April, new car sales slowed from a crawl to a snails’ pace. At 44% down on the same month a year ago, March’s drop in sales was mitigated by two weeks of fairly normal activity before the imposition of the lockdown.

“But April’s 97% year-on-year decline is unsurprisingly far more significant, with car dealerships closed across the UK.

“The industry’s eyes are firmly on the government’s next move, with dealers watching closely for any sign of an easing of the restrictions or further support for businesses forced to close.

“Down the line, there are likely to be calls for the government to offer additional incentives to get people buying new cars again. This stimulus could be combined with the UK’s Carbon Zero goals, and some in the industry believe we could see a scrappage scheme which simultaneously incentivises the take-up of environmentally-friendly vehicles.”

What Car? editorial director, Jim Holder, added: “Given the total lockdown there should be no surprise in these statistics. Instead, the car industry’s concern will be absolutely focused on what recovery looks like in light of the anticipated economic shock that is still to fully impact.

“We expect talk to turn to incentives soon ­– both from the industry’s car makers themselves, but also potentially from government, perhaps with an environmentally-focused scrappage scheme.”