Car sales face their worst performance since 1952 figures show

Demand for new cars fell by 89% last month as the sales were hit by the Coronavirus lockdown.

Thursday, 4th June 2020, 3:45 pm
Updated Thursday, 4th June 2020, 4:41 pm
Car dealerships have started to re-open amid the pandemic. Photograph: Peter Byrne/PA

Just 20,000 new cars were registered in May compared with 184,000 during the same month in 2019, the Society of Motor Manufacturers and Traders (SMMT) said, with plunging figures showing It was the automotive industry's worst May performance since 1952.

Just over half a million new cars have been sold in the first five months of 2020, compared with more than one million at the time last year.

Car showrooms across the UK have been closed for the whole of May, but limited deliveries of new vehicles ordered online could take place, as they begin reopen in England since Monday but remain closed in Scotland, Wales and Northern Ireland.

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Car dealerships could see fewer customers over the next few months. Copyright: Photo N Chadwick

Chapelhouse Motor Group are among the showrooms in Lancashire that opened their doors this week and have implemented precautions that will show customers their service will provide "the same great service".

A spokesperson said: "Luckily we have large spaces and a good team in place to enable us to follow all the necessary guidelines. We know that cars are still part of the everyday necessity for a lot of people, and we imagine that some may even consider moving away from busy public transport to their own vehicle. We have already been able to sell cars online and have been able to offer a 'click and collect' style of handover at some of our dealerships.

"I think for a lot of people looking online is second nature, but following through with a purchase that’s more substantial like a car, may have felt strange before lockdown, but now people can see that you still get the same great service and connection that you do in any of our stores even if it’s only digitally.

"All of our sales teams and our service teams were already used to sending individual video messages to our customers, and in these times that’s become more and more useful to ensure all the information is relayed quickly and easily but without losing that human contact."

Lookers announces they plan to close 12 dealerships.

The Society of Motor Manufacturers & Traders (SMMT) have been involved with ensuring the showrooms can be opened safely, following both the industry and the government guidance throughout the lockdown.

SMMT chief executive Mike Hawes said: "After a second month of shutdown and the inevitable yet devastating impact on the market, this week's reopening of dealerships 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 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 critical car manufacturers and supply chain, and to supporting the wider economy.

"Ensuring people have the confidence to invest in the latest vehicles will not only help them get on the move safely, but these new models will also help address some of the environmental challenges the UK faces in the long term."

Suttons Motor Services in Chorley are also among those welcoming customers back through their doors this week.

Fears over the new, post-lockdown landscape of car sales have been heightened as Lookers, which has showrooms across the North West, including Blackpool, Preston and St Helens, Manchester and Liverpool, said it was launching redundancy consultations across all areas of the group, which are expected to see around 1,500 jobs go among its 8,100-strong workforce.

The Altrincham-based group revealed it will shut another 12 sites - either by closure, merging with other showrooms or re-franchising – on top of the 15 dealerships being closed already under plans announced in November.

Yesterday, engineering giant Rolls Royce also announced that they are cutting 3,000 jobs across the UK, in a cost-cutting exercise that will see the manufacturer eradicate their global workforce by a fifth.

Christian Stadler, Professor of Strategic Management at Warwick Business School and an expert on the automotive industry, said: "It is no surprise that car manufacturers and dealers are feeling the pinch after sales plummeted during lockdown. However, a far bigger concern is that sales are unlikely to bounce back as lockdown is eased.

"Many people will feel less secure financially and more concerned about their jobs. They may hold off buying a new car, especially with the uncertainty of Brexit hanging over them as well. They might also feel less inclined to visit a car show room if social distancing measures continue.

"That has inevitably made job cuts more likely, but some firms who were struggling before the pandemic may also use COVID-19 as an excuse for cuts they were planning to make anyway.

"One crumb of comfort for the industry is that commuters may be more reluctant to use public transport after lockdown, which could encourage them to buy a new car if they are no longer working from home. However, if home working remains the norm after lockdown, that could convince even more people to put off purchasing a new car."