Call for government action as new car sales fall by more than a third

The UK’s new car market experienced a “tentative restart” last month as registrations fell by 34.9 per cent, far less than the previous two months.

Trade body SMMT said the decline reflected uncertain economic confidence and dealerships in Wales and Scotland remaining closed for much of the month due to the coronavirus lockdown. Picture: Lisa Ferguson

There were 145,377 new cars registered across the UK in June compared with 223,421 during the same month in 2019, according to the Society of Motor Manufacturers and Traders (SMMT).

The trade body said the decline reflected uncertain economic confidence and dealerships in Wales and Scotland remaining closed for much of the month due to the coronavirus lockdown.

Nearly 616,000 fewer new cars have been sold in the first six months of 2020 compared with the same point last year.

Year-on-year demand in April and May was down 97.3 per cent and 89 per cent respectively, largely due to the pandemic.

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.”

Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said: “Although it has been just a few weeks since dealers reopened their doors to potential punters, this data shows the scale of the challenge facing car dealerships as they begin operating in the UK vehicle market’s ‘new normal’.

Dealers will now hope that there is a wave of consumer confidence coming down the line.”

The best selling car in June was the Vauxhall Corsa, followed by the Ford Fiesta.

Karen Hilton, chief commercial officer at Heycar, said: “While the latest new car figures show a smaller monthly decline than in the previous two months, it’s clear there is still a long road to recovery for the industry.

“Despite increasing calls for the introduction of a scrappage scheme to boost sales, the government has recently insisted they have no plans to change the current incentives. And with the SMMT pushing for the government to set out a plan to support the future of the industry, it’s time to look at alternative stimulus to drive spend in the market.”

Alex Buttle, director of car selling comparison website Motorway.co.uk, added: “July figures will probably give us a clearer idea where consumer confidence and appetite to buy is right now.”

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