That's despite government guidance allowing dealers to sell cars online.
More than 4,300 new cars were registered in April despite the coronavirus lockdown, but the market still recorded an unprecedented drop in demand. Although dealers were still allowed to sell cars online and deliver to customers, the lockdown kept buyers away, and the market shrank by more than 97 percent compared with April 2019.
Figures released by the Society of Motor Manufacturers and Traders (SMMT) showed a total of 4,321 cars were registered last month, down from the 161,000 seen in the fourth month of 2019. The majority of those - some 3,000 vehicles - went to the fleet sector, while just 871 cars were registered on behalf of private buyers.
This result, which follows a March in which registrations fell by almost 45 percent, means the running total in 2019 stands at just under 488,000 new registrations. That’s down 43 percent on the 862,100 new cars registered at the same point in 2019.
Because of this, the SMMT has “downgraded” its expectations for the new car market in 2020 as a whole, predicting 1.68 million registrations. This, the organisation says, would be the market’s worst performance in almost 30 years, dropping demand below the levels seen during the financial crisis of the late 2000s and down more than 27 percent on 2019’s total.
Although such news is perhaps unsurprising, given the fact the UK is now enduring its seventh week of lockdown as it battles the Covid-19 pandemic, the SMMT says the health of the car market is crucial for the economy. Mike Hawes, the SMMT’s chief executive, said the safe restart of the motor industry would be “key” to the country’s economic recovery.
“With the UK’s showrooms closed for the whole of April, the market’s worst performance in living memory is hardly surprising,” he said. “These figures, however, still make for exceptionally grim reading, not least for the hundreds of thousands of people whose livelihoods depend on the sector.
“A strong new car market supports a healthy economy and as Britain starts to plan for recovery, we need car retail to be in the vanguard. Safely restarting this most critical sector and revitalising what will, inevitably, be subdued demand will be key to unlocking manufacturing and accelerating the UK’s economic regeneration.”
James Fairclough, the CEO of AA Cars, said the industry was looking at the government to tell it when and how it can reopen. Until then, he said, dealers were being forced to “sit tight” and wait until showrooms open their doors once again.
“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,” said Fairclough. “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 zero-carbon goals, and some in the industry believe we could see a scrappage scheme that simultaneously incentivises the take-up of environmentally-friendly vehicles.
“For the moment, all the industry can do is sit tight and wait for the news that forecourts can open again.”