Cars Registrations SMMT News

New car registrations decline -1.6% as Welsh ‘firebreak’ lockdown subdues demand

05 November 2020 #Cars #Registrations #SMMT News
  • UK new car market falls -1.6% in October, with 140,945 cars registered, marking a nine-year low for the sector.
  • Welsh ‘firebreak’ accounts for more than half of month’s losses, ahead of new ‘stay at home’ order for England, forcing UK showrooms to close in November.
  • Industry pins hopes on click & collect to avoid repeat of spring’s market wipe-out, but now facing double hit of reduced winter trading and challenge of Brexit.

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The UK new car market declined again in October, with registrations falling by -1.6% year on year, according to the latest figures published today by the Society of Motor Manufacturers and Traders (SMMT). The industry recorded 140,945 new registrations last month, making it the weakest October since 2011 and -10.1% lower than the average recorded over the last decade.1

The arrival of new models and ongoing financial incentives helped initially to sustain UK demand in the month, but the introduction of a ‘firebreak’ lockdown in Wales on 23 October contributed to the nation recording -25.5% fewer registrations by the end of the month, which accounted for more than half of the overall UK decline.

Subdued activity from businesses drove much of the month’s drop, with around 2,500 fewer vehicles joining larger fleets than in October last year, while private registrations saw a modest increase of 0.4%. However, this performance was flattered by a weak October 2019, when ongoing supply issues arising from regulatory challenges, as well as political and economic uncertainty ahead of the anticipated Halloween Brexit withdrawal date, saw overall registrations by private buyers recede by -13.1% in the month.

As of mid-October, the industry had been expecting to register about 1.66 million new cars in 2020. However, with the announcement of a second lockdown for England, which will include the closure of vehicle showrooms, the market forecast has been downgraded by a further 100,000 units to 1.56 million. This equates to a total year-on-year decline of around 750,000 registrations 2 and a £22.5 billion loss in turnover 3, with 2020 now likely to be the weakest year since 1982.4

While the continuation of click & collect and delivery services is welcome, and should help prevent a return to the sales wipe-out experienced in the spring, it cannot offset the loss of custom from the closure of showrooms themselves, given the unique nature of the car purchase process.

Mike Hawes, SMMT Chief Executive, said, 

When showrooms shut, demand drops, so there is a real danger that with England today 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.

Notes to editors

1 October 2011 registrations: 134,944; average October registrations 2010-2019 – 156,759
2Based on 2020 expected registrations of 1.56 million, compared to 2019 registrations of 2.31 million
3Based on JATO average price of c£30,000
41,555,027 registrations recorded in 1982

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