SMMT: UK coronavirus crisis wipes out April car sales

New car sales have tanked 97 per cent amid the UK coronavirus crisis, according to new stats from an industry body today.

That effectively means new UK car sales ground to a halt in April, the Society of Motor Manufacturers and Traders said. Just 4,321 cars were sold over the month – 70 per cent of which were for private company use.

That figure stands in stark contrast to 161,064 new cars registered in April 2019. 

Now the SMMT expects to record just 1.68m new UK car sales for 2020, down from 2.3m in 2019.

That is the UK car industry’s worst performance since just after the end of the Second World War, according to Reuters.

Just 4,044 cars were sold in the UK in February 1946, just a few months after the end of the war, Reuters said. Those numbers came amid rationing and a major rebuilding programme under a new Labour government.

SMMT boss Mike Hawes said: “With the UK’s showrooms closed for the whole of April, the market’s worst performance in living memory is hardly surprising.

“These figures, however, still make for exceptionally grim reading, not least for the hundreds of thousands of people whose livelihoods depend on the sector”.

Industry needs stimulus to boost demand

Coronavirus has also forced major UK car manufacturers to down tools at their factories, closing them from late March.

The industry was already struggling to combat declining car sales and a collapse in demand for diesel vehicles as the UK government seeks to ban petrol and diesel cars from 2035.

It remains unclear when UK car factories can reopen from the UK coronavirus lockdown. And Hawes has called on the government to offer the industry financial stimulus to help it recover.

“There will be some demand but we really want to see is a quick stimulus to demand to get people to consider buying cars,” Hawes told City A.M:

“Of course people’s livelihoods have been seriously threatened by what’s going on, but we need to get a quick boost in the market to get the wheels of manufacturing turning.”

Sue Robinson, director of the National Franchised Dealers Association agreed that it was “vital” that the government puts together a package which “stimulates the market and ensures the long-term stability of a sector which is key to the UK economy”.

Ian Plummer, commercial director at online marketplace Auto Trader, told the BBC: “Some brands have been able to sell remotely, but uncertainty in the government’s guidelines or a lack of the required infrastructure to operate home delivery in a safe way, has limited it to all but a handful of retailers.”

He said once the UK coronavirus crisis is over the car industry must accelerate plans to produce more electric vehicles, but that will require better financial incentives, such as scrappage schemes.

One bright spot in the grim figures was that the number of battery electric vehicles (BEVs) sold is still expected to double this year to 77,300.

Close Brothers motor finance’s head of finance Sean Kemple said that though lifting lockdown would see an immediate sales pick-up, the future was far less certain:

“We might start to see supply issues, held up by restrictions on manufacturing and the stalling of overseas shipment.

“In the longer-term, demand trends may change. We know that in times of economic hardship, buyers often shift from new to used cars in order to get their hands on a more affordable vehicle”.