According to figures published by the Society of Motor Manufacturers and Traders (SMMT), UK new car registrations fell -34.9% in June.
The drop was said to be an improvement on May’s -89.0% wipe-out but, with 145,377 new car registrations, this still represented a significant decline of 78,044 compared with June 2019, as dealerships in Wales and Scotland remained closed for much of the month.
The lacklustre performance also meant that the market was almost 616,000 units, or -48.5%, behind the same period last year, with some 240,000 private sales lost since consumers were told to ‘stay at home’ and retailers forced to close, reportedly resulting in an estimated £1.1 billion loss to the Treasury in VAT receipts alone.
Private demand reportedly proved more resilient than business, down -19.2% in June, with orders made pre-lockdown resulting in 72,827 registrations and accounting for more than half of the market. Fleet sales fell by-45.2% to 69,498 units as businesses paused purchasing amid expenditure reviews.
With one in five showrooms in England reportedly remaining shut throughout June and those in Wales and Scotland unable to open until the end of the month, there is said to be some uncertainty regarding the true level of demand. The hope for release of pent-up sales has not yet occurred; with consumer confidence for big-ticket purchases still looking weak it will mean that automotive is likely to lag behind other retail sectors.
As the wider retail and hospitality sectors re-open and society and the economy begin a gradual return to normality, the true picture of consumer confidence will likely emerge. However, concerns remain with the government’s Coronavirus Jobs Retention Scheme winding down and major employers across all sectors announcing significant job losses.
Mike Hawes, SMMT Chief Executive, said: “While it’s welcome to see demand rise above the rock-bottom levels we saw during lockdown, this is not a recovery and barely a restart. Many of June’s registrations could be attributed to customers finally being able to collect their pre-pandemic orders, and appetite for significant spending remains questionable.
“The government must boost the economy, help customers feel safer in their jobs and in their spending and give businesses the confidence to invest in their fleets. Otherwise it runs the risk of losing billions more in revenue from this critical sector at a time when the public purse needs it more than ever.”