New car sales fall in ‘disappointing’ August for market
New car sales dropped again last month, reversing July’s increase, with just over 87,000 models sold in what is traditionally one of the quietest months for trading.
According to new figures from the Society for Motor Manufacturers and Traders, new car sales fell 5.8 per cent in August.
In July, the first full month of trading since dealerships reopened after the coronavirus lockdowns, sales spiked 11 per cent as a wave of pent-up demand was released.
In total, new registrations are down by 39.7 per cent in the year so far, around 600,000 units behind this time in 2019, following the lockdown period.
Despite the overall decline, it was a bumper month for zero-emissions vehicles, with the release of a number of new models leading to 221 per cent increase in sales of plug-in hybrids.
However, such vehicles still make up just one in every 30 models sold, illustrating the challenge ahead to reach the government target for EVs to comprise 70 per cent of new car sales by 2030.
The figures came as the automotive industry calls for binding targets on charging infrastructure development and long-term commitments to incentivise the purchase of zero emission capable vehicles to accelerate demand.
Auto industry gears up for crunch September
SMMT chief executive Mike Hawes said the decline was disappointing, but warned that people shouldn’t draw too many conclusions from the figures, saying that September would be a much better measure.
“The decline is disappointing, following some brief optimism in July. However, given August is typically one the new car market’s quietest months, it’s important not to draw too many conclusions from these figures alone”, he said.
“With the all-important plate change month just around the corner, September is likely to provide a better barometer. As the nation takes steps to return to normality, protecting consumer confidence will be critical to driving a recovery.”
James Fairclough, chief executive of AA Cars, agreed, saying September would give a “more complete picture” of how the market is performing.
“September is traditionally one of the busiest in the calendar – with the market given a boost as new registration plates are introduced and dealers work hard to hit quarterly targets”, he said.
Karen Johnson, Head of Retail & Wholesale at Barclays Corporate Banking, said that the changes in lifestyle brought about by the pandemic could yet be good news for the market.
“A lot of buyers have more cash in their pockets for big ticket purchases following months of lockdown with lower expenditure”, she said.
“Many have also reviewed their household logistics, with nervousness of public transport and changing working patterns all leading people to rethink their vehicle needs.”