Coronavirus triggers bigger slide in car sales than during financial crisis

New car sales plummeted 44 per cent last month, marking a steeper fall than during the financial crisis, as dealers shut showrooms amid the coronavirus emergency.

Just under 255,000 new cars were registered in March, 203,370 fewer than in the same month last year, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). Picture: Lisa Ferguson

Just under 255,000 new cars were registered in March – 203,370 fewer than in the same month last year – according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

The performance represents a steeper fall than during the 2008/2009 financial crisis and is the worst March since the late 1990s, when the market changed to the biannual number plate change system.

Several other European countries went into coronavirus lockdowns earlier than the UK, meaning their fall in demand for new cars was more significant.

Sales in Italy declined by 85 per cent last month, while France and Spain saw decreases of 72 per cent and 69 per cent respectively.

SMMT chief executive Mike Hawes said: “With the country locked down in crisis mode for a large part of March, this decline will come as no surprise.

“Despite this being the lowest March since we moved to the biannual plate change system, it could have been worse had the significant advance orders placed for the new 20 plate not been delivered in the early part of the month.

“We should not, however, draw long-term conclusions from these figures other than this being a stark realisation of what happens when economies grind to a halt.”

He added: “How long the market remains stalled is uncertain, but it will reopen and the products will be there. In the meantime, we will continue to work with government to do all we can to ensure the thousands of people employed in this sector are ready for work and Britain gets back on the move.”

Alex Buttle, director at the car selling comparison website Motorway.co.uk, said: “It’s unfair to read too much into these apocalyptic figures, as coronavirus is a crisis unlike any other faced by the car industry in peacetime Britain.

“With production lines eerily silent, supply chains blocked and thousands of workers now furloughed for the foreseeable future, the UK car industry is battling the same issues as many others.

“At best we could be looking at a couple of months before production resumes and the UK car industry can start rebuilding itself, but by then we’re likely to be facing many new post-coronavirus realities.”

Karen Hilton, chief commercial officer at used car marketplace Heycar, added: “Such a dramatic decline in registrations is proof that Covid-19 will ricochet through the industry for weeks and months ahead.

“However the current situation offers an opportunity for dealers to become fully digitally operational and nurture customers online. Dealers are using this time wisely to accelerate their digital capabilities which is allowing them to maintain a level of trading at this difficult time.”