Take a fresh look at your lifestyle.

New car registrations down by a third in June despite dealers reopening

UK new car registrations fell by more than a third in June, the Society of Motor Manufacturers and Traders (SMMT) today has confirmed.

Last month’s figures have been eagerly anticipated with showrooms reopening on 1 June as part of eased lockdown measures. The results have provided an initial insight into the auto market’s potential for recovery from the coronavirus shutdown and level of consumer confidence to make big-ticket purchases.

While registrations were down by 35 per cent in June, it was a marked improvement on the declines of 89 per cent in May and 97 per cent in April when visitors were banned from dealerships.

Are these signs of recovery for the UK auto sector? Registrations of new cars fell by a much smaller amount than in the previous two months, though the trade body warn that June figures won't be a clear indication of how the motor industry will fare post-pandemic

Are these signs of recovery for the UK auto sector? Registrations of new cars fell by a much smaller amount than in the previous two months, though the trade body warn that June figures won’t be a clear indication of how the motor industry will fare post-pandemic 

Some 145,377 new cars were registered in the sixth month of 2020, the UK automotive trade body confirmed.

That’s 78,044 fewer than in June 2019 – though dealerships in Wales and Scotland remained closed for much of the month.

Despite showrooms in England being allowed to welcome customers back from the start of last month, dealerships in Wales weren’t given the green light to open until 22 June, while those in Scotland had to wait until 29 June.

Around one in five showrooms in England also remained shut throughout last month, meaning today’s figures don’t provide the full scale of the true level of demand. 

In a statement released on Monday morning, the trade body said: ‘The hoped for release of pent-up sales has not yet occurred, with consumer confidence for big ticket purchases looking weak meaning that automotive is likely to lag behind other retail sectors.’

While sales were down 35% in June, it was a a marked improvement on the declines of 89% in May and 97% in April

While sales were down 35% in June, it was a a marked improvement on the declines of 89% in May and 97% in April

While sales were down 35% in June, it was a a marked improvement on the declines of 89% in May and 97% in April

The SMMT said some of these private bought vehicles were orders made pre-lockdown, though the stats show that public demand for cars accounted for more than half of the market

The SMMT said some of these private bought vehicles were orders made pre-lockdown, though the stats show that public demand for cars accounted for more than half of the market

The SMMT said some of these private bought vehicles were orders made pre-lockdown, though the stats show that public demand for cars accounted for more than half of the market

The SMMT described 2020 first-half sales as ‘lacklustre’, with registrations down 49 per cent as almost 616,000 fewer new vehicles hit the road in the opening six months of the year compared to the same period in 2019. 

It calculated that some 240,000 private sales have been lost since consumers were told to ‘stay at home’ and retailers forced to close from 23 March, resulting in an estimated £1.1 billion loss to the Treasury in VAT receipts alone.

Are these signs that the motor industry will recover quickly? 

But June figures show there is appetite for new cars among motorists, despite millions of workers remaining on furlough until the end of July or on reduced hours and salary as businesses move towards increasing operating levels back to pre-Covid levels.  

Demand from private car buyers was down by just 19 per cent last month, with 72,827 new motors appearing on driveways.

The SMMT said some of these vehicles were orders made pre-lockdown, though the stats show that public demand for cars accounted for more than half of the market.  

This was also due to fleet sales being down a substantial 45 per cent, as businesses paused purchasing amid expenditure reviews.

Industry insiders said the true picture of consumer confidence will not be revealed until the wider retail and hospitality sectors re-open and society and the economy begin a gradual return to normality. 

And they remain concerned that with the government’s Coronavirus Jobs Retention Scheme winding down and major employers across all sectors announcing significant job losses, spending is going to shrink further in a ‘depressed market’.  

Car dealers in England were allowed to reopen - with extensive coronavirus measures in place - from 1 June

Car dealers in England were allowed to reopen - with extensive coronavirus measures in place - from 1 June

Car dealers in England were allowed to reopen – with extensive coronavirus measures in place – from 1 June

Showrooms in Wales weren't given the green light to welcome back customers until 22 June, while dealers in Scotland were only allowed to open their doors from 29 June

Showrooms in Wales weren't given the green light to welcome back customers until 22 June, while dealers in Scotland were only allowed to open their doors from 29 June

Showrooms in Wales weren’t given the green light to welcome back customers until 22 June, while dealers in Scotland were only allowed to open their doors from 29 June

Dealers across the UK have had to incorporate one-way systems, install hand sanitiser stations and put in place strict cleaning protocol to ensure the safety of the visiting public

Dealers across the UK have had to incorporate one-way systems, install hand sanitiser stations and put in place strict cleaning protocol to ensure the safety of the visiting public

Dealers across the UK have had to incorporate one-way systems, install hand sanitiser stations and put in place strict cleaning protocol to ensure the safety of the visiting public

Mike Hawes, SMMT chief executive, explained, ‘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.’

Pictured: A Porsche in Chiswick, West London. Face masks, wipes and gloves are at the entrance for customers and staff to use, along with tape on the floor to guide people

Pictured: A Porsche in Chiswick, West London. Face masks, wipes and gloves are at the entrance for customers and staff to use, along with tape on the floor to guide people

Pictured: A Porsche in Chiswick, West London. Face masks, wipes and gloves are at the entrance for customers and staff to use, along with tape on the floor to guide people

A customer wearing a face mask to protect against coronavirus as part of efforts to enforce social distancing in the car servicing department at the Trident Honda car dealership in Ottershaw, England

A customer wearing a face mask to protect against coronavirus as part of efforts to enforce social distancing in the car servicing department at the Trident Honda car dealership in Ottershaw, England

A customer wearing a face mask to protect against coronavirus as part of efforts to enforce social distancing in the car servicing department at the Trident Honda car dealership in Ottershaw, England

The automotive retail sector employs more than 590,000 people and, with a £200 billion turnover, is one of the UK’s most valuable economic assets.

The SMMT warned last month that without government support, one in six UK motor industry workers’ jobs are now at risk.

The annual tax-take from VAT, VED and other duties on new car sales to private buyers alone amounts to some £5.4 billion, while the sector also helps drive the UK’s £82billion automotive manufacturing industry, supporting a further 168,000 high-skilled and high-paid jobs in communities across every nation and region of the UK, and delivering billions to the economy every year.

Alex Buttle, director of car selling website Motorway.co.uk, said July figures will ‘probably give us a clearer idea where consumer confidence and appetite to buy is right now’, as the suggestion of pent-up demand for new vehicles will have dissipated, providing a clearer indication of demand.

‘The worry is that in the current economic climate, with many people unsure about their jobs when they come off furlough, the new car market will be slow to return to a sense of normality, without any meaningful incentives from the Government to turbo-charge growth,’ he added. 

Vauxhall's recently released new-generation Corsa was the best-selling new car in March. Though the SMMT said many of the registrations could be deliveries of orders made before the lockdown was put in place

Vauxhall's recently released new-generation Corsa was the best-selling new car in March. Though the SMMT said many of the registrations could be deliveries of orders made before the lockdown was put in place

Vauxhall’s recently released new-generation Corsa was the best-selling new car in March. Though the SMMT said many of the registrations could be deliveries of orders made before the lockdown was put in place

Corsa tops sales charts – and electric car demand keeps booming 

In June, Vauxhall’s brand new Corsa became the UK’s best-selling car, with 4,528 registrations last month.

It was just ahead of its biggest rival, the Ford Fiesta (4,386 registrations), which has been the nation’s favourite new motor for 11 years running, and knocked the Tesla Model 3 from the top of the standings for the previous two months.

With 4,200 sales, the Toyota Yaris was the third most-bought new car, suggesting plenty of demand for the supermini market.

In fact, June was a strong month for the Japanese brand as a whole, with Toyota dealers selling the third largest volume of new motors last month.

With 11,709 registrations, Toyota dealers shifted 311 more vehicles than it did in the same month of 2019 – a year-on-year increase of almost 3 per cent.

Ford dealers saw the most activity, selling 13,622 vehicles (down 38 per cent), ahead of VW showrooms, which sold customers 12,421 cars (down 39 per cent).

MG Motor, which is owned by Chinese firm SAIC Motor UK, celebrated its best ever sales results for the month, with the brand selling 2,025 cars – its biggest ever June and its second highest volume month ever, after March 2020.

MG Motor said it was celebrating its best June on record - a small victory at a time when the motor industry is struggling

MG Motor said it was celebrating its best June on record - a small victory at a time when the motor industry is struggling

MG Motor said it was celebrating its best June on record – a small victory at a time when the motor industry is struggling

Battery-electric car sales rose by a massive 262%t in June, as registrations increased from 2,461 in June 2019 to 8,903 last month

Battery-electric car sales rose by a massive 262%t in June, as registrations increased from 2,461 in June 2019 to 8,903 last month

Battery-electric car sales rose by a massive 262%t in June, as registrations increased from 2,461 in June 2019 to 8,903 last month

And as well as success stories for individual manufacturers, there continued to be plenty of demand for alternative-fuel vehicles, with battery-electric car sales up 262 per cent in June, as registrations rose from 2,461 in June 2019 to 8,903 last month.

Plug-in hybrid sales were also 117 per cent higher, while demand for conventional ‘self-charging’ hybrids was up by 19 per cent. 

Seán Kemple, director of sales at Close Brothers Motor Finance, said the figures showed the signs of the UK motor industry beginning to ‘reap the rewards’ of returning from lockdown, despite through big changes in June.

He compared the demand levels to those in other countries, where motor dealers were allowed to re-open a month earlier than showrooms in England. 

‘The V-shaped recovery that we’ve already seen in China and Germany should be mirrored in the UK – we all have our fingers crossed as the country starts its ascent,’ he explained.

July registration figures are expected to give a better indication of consumer demand for new cars, according to various experts from the motor industry

July registration figures are expected to give a better indication of consumer demand for new cars, according to various experts from the motor industry

July registration figures are expected to give a better indication of consumer demand for new cars, according to various experts from the motor industry

Some insiders have warned that the next problem the sector faces could be caused by a lack of supply of new cars, with manufacturers operating at reduced production levels post lockdown

Some insiders have warned that the next problem the sector faces could be caused by a lack of supply of new cars, with manufacturers operating at reduced production levels post lockdown

Some insiders have warned that the next problem the sector faces could be caused by a lack of supply of new cars, with manufacturers operating at reduced production levels post lockdown

The SMMT warned last month that without government support, one in six UK motor industry workers' jobs are now at risk

The SMMT warned last month that without government support, one in six UK motor industry workers' jobs are now at risk

The SMMT warned last month that without government support, one in six UK motor industry workers’ jobs are now at risk

He warned that if demand continues to grow, it will put ‘immense pressure’ on car makers. 

‘Faced with social distancing restrictions, job losses, and falling profits, it will be no easy task [for manufacturers] to kickstart production to pre-Covid-19 levels,’ he added. 

‘Beyond the immediate uplift, once available stock has been swept off the forecourts, buyers will likely face long waiting times for their cars which will slow recovery. 

‘The whole market has been caught in the net; manufacturers, dealers, and finance providers alike are dealing with a sudden surge in demand while recovering from the financial impact on their business. 

‘Support from the Government will be crucial to get the sector back to strength, as will the expertise from dealers to help consumers feel confident in their big purchase.’

Michael Woodward, UK automotive lead at Deloitte, said: ‘The automotive industry is taking positive steps towards recovery from the impact of Covid-19.  

‘Despite the year-on-year decline in sales, these results will have exceeded many people’s expectations. 

‘Dealerships have worked hard to encourage consumers back through their doors. However, the full scale of these efforts may not be reflected in June’s figures as supply issues delay some registrations.’

SAVE MONEY ON MOTORING

Some links in this article may be affiliate links. If you click on them we may earn a small commission. That helps us fund This Is Money, and keep it free to use. We do not write articles to promote products. We do not allow any commercial relationship to affect our editorial independence.

.