Demand for new motors fell by 1.6 per cent last month compared with October 2019, new industry data revealed.
The Society of Motor Manufacturers and Traders (SMMT) said 140,945 registrations were recorded in the UK last month, marking the weakest October outcome since 2011.
Restrictions in Wales as part of the country’s coronavirus “firebreak” lockdown accounted for more than half of the year-on-year losses.
SMMT chief executive Mike Hawes said: “When showrooms shut, demand drops, so there is a real danger that with England entering a second lockdown, both dealers and manufacturers could face temporary closure.
“What is not in doubt, however, is that the entire industry now faces an even tougher end to the year as businesses desperately try to manage resources, stock, production and cashflow in the penultimate month before the inevitable upheaval of Brexit.
“Keeping showrooms open – some of the most Covid-secure retail environments around – would help cushion the blow but, more than ever, we need a tariff-free deal with the EU to provide some much-needed respite for an industry that is resilient but massively challenged.”
Alex Buttle, director of used car marketplace Motorway.co.uk, said: “After the reg-plate change in September failed to light a rocket under new car registrations, sales expectations weren’t too optimistic for October.
“Under the circumstances, a 1.6 per cent decline in registrations could be considered a good result, particularly against the backdrop of rising Covid-19 cases and economic uncertainty.
“The new car industry is now facing even more issues as we go into a month-long lockdown [in England]. But despite the bleak picture, we don’t expect to see a similar slump in new car sales like we witnessed back in March through to June.
“This lockdown feels very different. The general mood amongst dealers and buyers feels quite bullish.”
Karen Hilton, chief commercial officer at Heycar, said: “The rollercoaster of 2020 continues – but the automotive industry is much better set up to deal with what lies ahead. Things don’t feel as uncertain as they did back in March.
“The reason we feel that we can all weather the storm is that dealerships are no longer defined by their four walls and forecourt – their digital offering is just as important. Online models have developed quickly and staff have adapted to this new way of working.”
James Fairclough, chief executive of AA Cars, said: “October’s small slump in new car sales marks a third successive decline for the market, with registrations slowing significantly since the high point in July when pent-up demand lifted sales by 11 per cent.
“The steady decline in sales is a sign that consumers are holding onto their money, with many concerned about their job security and what may happen to their finances in the future.
“This, along with November’s new lockdown, suggests that recovery is likely to be slightly more challenging in the latter part of 2020, and that dealers may need to find innovative ways to entice customers to forecourts.”