Pent-up demand sees car sales accelerate

Car sales have registered their first monthly rise this year following the reopening of dealerships as lockdown measures eased.

The Vauxhall Corsa was the most popular model UK-wide. Picture: Vauxhall Motors.

Scotland’s dealerships saw a 36.5 per cent increase in July compared to the same month last year, only behind Wales for growth in the UK. Although there were 15,568 new cars registered in Scotland during the month, the running total for the year still stands at almost 47 per cent down on the same point last year.

A UK-wide 11.3 per cent rise in July was welcomed by the industry, but commentators cautioned it will be some time before it is clear whether the increase signals a wider recovery. Some 174,887 cars were registered across the UK in July, according to the Society of Motor Manufacturers and Traders (SMMT).

Public appetite for zero and ultra-low-emission cars remained strong, with plug-in hybrids and battery electric vehicles taking a 9 per cent share of registrations for July, up from 3.1 per cent for 2019 overall.

Private demand saw the most significant growth with a 20.4 per cent increase in overall registrations, primarily a result of consumers being able to renew their cars after lockdown had forced them to delay. Business car registrations showed modest growth, with fleet purchases increasing by 5.2 per cent.

But despite the monthly increase, UK registrations for the first seven months of the year are down 41.9 per cent and the SMMT’s full-year outlook is for a 30 per cent decline in registrations, representing more than £20 billion of lost sales.

SMMT chief executive Mike Hawes said: “July’s figures are positive, with a boost from demand pent up from earlier in the year and some attractive offers meaning there are some very good deals to be had.

Caution

“We must be cautious, however, as showrooms have only just fully reopened nationwide and there is still much uncertainty about the future. By the end of September, we should have a clearer picture of whether or not this is a long-term trend.

“Although this month’s figures provide hope, the market remains fragile in the face of possible future spikes and localised lockdowns as well as, sadly, probable job losses across the economy. The next few weeks will be crucial in showing whether or not we are on the road to recovery.”

Dan Hutson, head of motor insurance for comparethemarket, said although the July figure is likely due to pent-up demand from nearly three months of dealership closures, there were wider signs of hope for the sector.

“With more people driving to work, to avoid exposure to the virus on all forms of public transport, we may see continued resurgence in demand. Our recent research found that 61 per cent of people expected to drive to work when they return to the office, compared to 34 per cent prior to the coronavirus pandemic.

"What remains to be seen is whether this demand will result in more positive months of new car registrations, or whether people will favour second-hand vehicles as the UK feels the financial effects of the pandemic.”

The Vauxhall Corsa was the most popular model UK-wide, followed by Ford’s Fiesta and Focus and the VW Golf.

SCOTSMAN.COM

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