Car sales in the UK plummet 97.3% in April

Coronavirus killed car sales, but could there be a bounce-back?

New car sales in the UK crashed a staggering 97.3 in the month of April as a result of the COVID-19 coronavirus lockdown. Only 4321 cars were sold, compared to 156,743 in April 2019. The only time fewer cars were sold in a single month was during World War II.

The Society of Motor Manufacturers and Traders (SMMT), estimates that the total sales for the year will be 1.68m, the lowest number since 1992 (1.59m) – 27% down on 2019 (2.31m). The UK wasn’t alone of course as sales in France were down 88.8% in April and Italy fared slightly worse than the UK at 97.5%.

Private buyers only bought 871 cars, whilst fleet sales still managed 3090 units. The top-three best-sellers were Tesla Model 3 (658 sold), Jaguar I-Pace (367), Vauxhall Corsa (264), despite the year’s overall top selling cars being the Ford Fiesta, Volkswagen Golf and Ford Focus in that order. Meanwhile, the niche battery electric vehicles sector saw a smaller percentage decrease of -9.7%, as some pre-ordered deliveries of the latest premium models were able to be fulfilled.

Mike Hawes, SMMT Chief Executive, said, “With the UK’s showrooms closed for the whole of April, the market’s worst performance in living memory is hardly surprising. These figures, however, still make for exceptionally grim reading, not least for the hundreds of thousands of people whose livelihoods depend on the sector.

“A strong new car market supports a healthy economy and as Britain starts to plan for recovery, we need car retail to be in the vanguard. Safely restarting this most critical sector and revitalising what will, inevitably, be subdued demand will be key to unlocking manufacturing and accelerating the UK’s economic regeneration.”

There is cause for optimism. According to Ian Plummer, Commercial Director, Auto Trader: “Whilst the market is down significantly, our data does point to a market that has been paused, rather than stopped, and ready to return to health quickly once the restrictions have been lifted.

“Whilst traffic to our platforms has fallen we’re still seeing circa 1 million visits every day. What’s more, our research of over 3,000 consumers conducted last week showed that only 2% have been put off from buying a new vehicle. In fact, 25% said they wanted to buy a vehicle as soon as they could, and 57% said they’d still buy in 2020.”

A survey by CarGurus, an online car retailer, adds credence to this view, claiming that most consumers in the market to purchase a car before the pandemic hit are still intending to do so after lockdown restrictions are lifted.

The CarGurus COVID-19 UK Consumer Sentiment Study shows that many buyers are likely to return to the market sooner than expected with nearly a quarter (24%) wanting to purchase as soon as lockdown restrictions are lifted, while 84% of those who plan to buy in 2020 are actively researching now.

“There is no doubt the COVID-19 pandemic is having an impact on the automotive industry, but our study shows it’s not all bad news for the sector,” said Madison Gross, Director of Customer Insights at CarGurus. “Many consumers are still planning to buy a vehicle quickly when the lockdown ends. And in a strange twist, concerns about public transport and ride-sharing may actually drive new demand.”

This was echoed by Autotrader’s Plummer: “48% of public transport users are less likely to use it as a result of social distancing anxieties, and for the same reason, 56% of driving licence holders who don’t currently own a vehicle would now consider buying one.”

The CarGurus survey cautions: “While it’s clear there’s still appetite to buy, this does not mean that consumers are not concerned about the impact of the pandemic on buying. In fact, economic uncertainty (30%), dealership closures (32%) and believing their purchase is putting people at risk (26%) were cited as some of the barriers to buying right now.

“But for many, a vehicle purchase is essential: nearly two thirds of buyers (64%) reported that their vehicle purchase was necessary. There may also be a shift in consumers now looking to buy a used car or approved used car, as 37% of those who had initially planned to buy new now plan to buy used or approved used.”

Plummer concluded: “With potentially more people behind the wheel, there’s a chance for the industry to accelerate the adoption of low emission vehicles. However, it’ll be essential for manufacturers to push more EVs into their UK networks along with greater financial incentives.

“Discussions have already started in Germany and France, for example, into the possible introduction of scrappage schemes favouring low CO2 cars and EVs. Otherwise consumers will stick to what they know. It’ll be a wasted opportunity to drive positive change in the market and will push the government’s 2035 emissions ambitions further out of reach.”