Car sales fall again in worst October in nine years
Sales of new cars declined again last month in the weakest October in nine years for the UK car market.
New figures from the Society of Motor Manufacturers and Traders (SMMT) said that sales dropped 1.6 per cent to 140,945.
More than half of the decline came as a result of Wales’ two week “firebreak” lockdown, the SMMT said.
The auto body warned that it was vital for the government to keep showrooms open through the new national lockdown.
October’s decline came after a disappointing performance in September, widely considered a key month for car sales.
As a result, the SMMT is now expecting 2020 to be the weakest year for car sales since 1982, with around 750,000 registrations to be lost.
This equates to a £22.5bn loss in turnover for car dealers.
Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said that a second month of declines showed that there would be no v-shaped recovery for the car market.
“Pent-up demand that developed during the first lockdown and aversion to using public transport has lifted car registrations back to 2019 levels temporarily, but the medium-term outlook remains bleak for dealers”, he said.
However, in a fleeting glimmer of hope, the figures showed that private sales had actually increased 0.4 per cent in the period, with the decline largely driven by fleet sales.
Karen Johnson, head of retail and wholesale at Barclays said that the industry would be hoping lockdown would further boost private demand:
“[Car dealers] will now be hoping that consumer appetite for spending on big ticket purchases will have grown by the time the UK comes out of a widespread lockdown, and sales can pick up lost trade as we head into the festive period.”
Once again the SMMT called for the government to secure a tariff-free trade deal with the EU in order to give it future security.
Chief exec Mike Hawes said: “What is not in doubt, however, is that the entire industry now faces an even tougher end to the year as businesses desperately try to manage resources, stock, production and cashflow in the penultimate month before the inevitable upheaval of Brexit.
“Keeping showrooms open – some of the most Covid-secure retail environments around – would help cushion the blow but, more than ever, we need a tariff-free deal with the EU to provide some much-needed respite for an industry that is resilient but massively challenged.”