Figures published this week by SMMT showed the UK new car market in freefall for a second month running, with registrations down -89.0% in May, as lockdown continued to take its toll. There were 20,247 new cars registered in total, amounting to some 163,477 fewer than the same month last year, making this the worst May since 1952.
The overall market is now down -51.4% in the first five months of 2020 at just over half a million registrations compared with more than one million at this point last year. This week’s re-opening of dealerships, therefore, is a pivotal moment for the entire industry and the thousands of people whose jobs depend on it.
Customers keen to trade up into the latest, cutting-edge new cars are now able to return to showrooms and early reports suggest there is good business given the circumstances, although of course it is far too early to tell how demand will pan out over the coming weeks and months.
Restarting this market is a crucial first step in driving the recovery of Britain’s vital car manufacturing and supply chain sectors, and to supporting the wider economy. However, while there will be some pent-up demand, the effect of this crisis on underlying consumer confidence is unclear and it is possible that we will need to work with government to identify ways of boosting demand, especially given the contribution this sector makes to GDP and jobs.
Demand is one thing, however, and SMMT has also been engaged in dialogue with the Government, highlighting the myriad challenges this sector is facing and the support needed as restart gets underway. It has been a devastating week for the sector, with job cuts across retail and manufacturing coming hard on the heels of earlier losses. As the sector strives to weather the worst storm in a generation, measures to drive cash flow, stimulate demand and, above all, maintain our competitiveness are essential.
Governments must double down on efforts to reboot economies, protect jobs and, internationally, work urgently to secure ambitious free trade agreements which avoid tariffs that add onerous cost and stifle global growth.
I leave you with news that the next Covid-19 webinar will be held on Tuesday 9 June at 15:00-16:00. The line-up will feature SMMT experts, alongside Paul Dowell of RSM, who will outline strategies to cope with a sudden uplift in demand, growing capacity without committing to long term investment, maximising throughput with reduced staffing and achieving restart at pace. You can sign up here.
