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Lockdown showroom closures fuel 30% decline in 21-plate new car orders

Philip Nothard, Cox Automotive’s customer insight and strategy director

New data from Cox Automotive shows orders for new ‘21’ number plate cars in March, usually the industry’s best performing car sales month of the year, were down by as much as 30%.

Analysis of auction sales during the three national lockdowns shows both new and used car sales in the UK have fallen below expectations during the second and third lockdowns.

News of the slow outlook for new car orders comes just a week after Society of Motor Manufacturers and Traders (SMMT) chief executive, Mike Hawes, suggested that car dealers should be braced for “a third, successive dismal new plate month” in March after COVID-19 ‘Lockdown 3’ delivered a 35.5% decline to the UK’s new car registrations in February.

Cox’s research also highlighted that click-and-collect schemes, aimed to improve car sales during the pandemic, are not working well enough to make up the sales shortfall.

According to Cox, January 2021 saw new and used vehicle days in stock increase, coinciding with the lower sales figures during the third lockdown.

Franchised dealers reported 48.9 average days in stock, compared to 42.4 the previous year.

Independent dealers reported 48.8 days, compared to 42.5 in the previous year, and car supermarkets reported 48.1 days compared to 40.6 days in January 2020.

Philip Nothard, insight and strategy director at Cox Automotive, said: “The data on car sales during the third lockdown makes for difficult reading, but it also provides some optimism.

"Seventy percent of dealers report the third lockdown has caused a 10-30% reduction in new car orders, and 17% of dealers have been hit as badly as up to 50%.

“This highlights why it’s imperative for the industry, that car showrooms reopen on April 12.

"Thankfully, over half of the dealers we asked believe that economic conditions will improve once the third lockdown ends.”

The first lockdown of late March to June 2020 accounted for 77% of the -680,076 deficit in new car registrations last year, and a -1.1m deficit in used car sales.

Compared to the results of 2019, new car sales in March 2020 decreased by 44%, April saw a decrease of 97.14% and May saw a decrease of 88.98%.

For used car sales, the year-on-year fall in March 2020 was a decrease of 30.72%, April was a decrease of 74.22% and May was a decrease of 57.11%.

The second lockdown of November to December 2020 saw car sales decrease more gently compared to the previous year and was the motor trade’s best performance in any lockdown period.

New car sales in November 2020 decreased 27.35% on the previous year and December saw a decrease of 10.95%. Used car sales in November fell by 18.33% and December results recorded a fall of just 4.23%.

Nothard added: “The opening of car showrooms on April 12 is a real opportunity for dealers to boost sales volumes after a hugely challenging 12 months. April and May could see a surge in new car sales, coinciding with the recent release of the new ‘21’ number plate.

“Less popular click-and-collect schemes, born out of necessity, will be supplemented hugely by the more standard showroom and test-drive experience that customers are used to.  Furthermore, consumer spending in 2021 could well shift to the car market, since other large-scale purchases such as holidays abroad, continue to be surrounded by risk and uncertainty.”

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