UK new car registrations rose for the first time this year, by 11.3% in July, according to figures published by the Society of Motor Manufacturers and Traders.
Some 174,887 cars were registered in July 2020 as dealerships across the UK opened for their first full month of trading since February.2 This represents a significant improvement on the same month last year, when declining business and consumer confidence undermined the market.
Pent-up demand and special offers led to a reprieve for the sector, but overall registrations are still down by -41.9% or 598,054 units year-to-date. Despite the increase in July, SMMT’s full year outlook is for a – 30% decline in registrations, representing more than £20 billion of lost sales.
Private demand saw the most significant growth with a 20.4% increase in registrations, primarily a result of consumers finally being able to renew their cars after lockdown had forced them to delay. In addition, manufacturer incentives have helped attract customers to showrooms. Eight of the 10 major manufacturers provided attractive finance offers and flexible payment terms in a bid to head off consumer uncertainty3 – vital as the Coronavirus Job Retention Scheme phases out, potentially sparking redundancies across the economy and impacting confidence to invest in big ticket purchases.4
Business car registrations showed modest growth, with fleet purchases increasing by 5.2%. Even so, more than 13,000 jobs have now been lost by UK Automotive across retail and manufacturing as a result of the pandemic, with more likely to follow given the scale of the challenges facing the sector, including shifts in technology, Brexit uncertainty and a depressed market.
Mike Hawes, SMMT Chief Executive, said: “July’s figures are positive, with a boost from demand pent up from earlier in the year and some attractive offers meaning there are some good deals to be had. We must be cautious, however, as showrooms have only just fully reopened nationwide and there is still much uncertainty about the future.”