New car sales rise in UK after coronavirus lockdown decline
UK car sales rebounded in July as dealers benefited from coronavirus lockdown easing, while sales of battery electric vehicles continued to surge.
British new car registrations rose by about 11% year-on-year in July, with almost 175,000 sales, according to data released by the Society of Motor Manufacturers and Traders (SMMT), the industry lobby group.
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The reopening has provided some welcome relief for the industry, and the July figures also suggest that the jump in sales of electric cars recorded in the first half of the year will endure beyond lockdowns. Tesla’s Model 3 electric car briefly topped sales charts while traditional dealerships remained closed.
Battery electric cars made up 4.7% of all new car sales in July and across 2020, the SMMT said, compared with only 1.4% at this point in 2019. Electric car sales have almost tripled in 2020 compared with 2019, as carmakers rush to reduce their emissions to avoid steep fines.
The same factor has also driven sales of plug-in hybrids – which combine a battery and an internal combustion engine – to quadruple in July compared with 2019. The share of petrol versions of so-called mild hybrids, which have a much smaller battery, tripled year-on-year in July.
The figures represent the first monthly increase since December 2019, before the coronavirus outbreak spread across the world. However, sales are still down by more than 40% over the first seven months of 2020 compared with 2019, a loss of more than half a million sales year-on-year.
The car industry was hit particularly hard by the lockdown, with dealership closures cutting off a large proportion of revenues, while every major car factory across Europe was forced to close temporarily because of supply chain problems and concerns for workers’ safety.
July was the first full month of trading nationwide after dealerships were allowed to reopen their doors to customers on 1 June in England, 8 June in Northern Ireland, 22 June in Wales and 29 June in Scotland.
However, the prospects for workers in the industry are bleak as an unemployment crisis looms, despite the rapid increase in the sales of electrified vehicles.
More gloom is expected in factories and dealerships as the economic crisis unfolds. The SMMT’s count suggested that more than 13,000 job losses had been publicly announced so far in 2020 across the sector.
Most UK factories, with the exceptions of Vauxhall’s Ellesmere Port plant and Aston Martin’s main Gaydon facility, have restarted production but UK production in the first half of the year was the lowest since 1954 – the year second world war rationing ended – with only 380,000 cars rolling off lines.
The automotive retail industry was already under particular pressure from structural changes such as the growing – albeit belated – popularity of online car sales, with the lockdown denting profitability further.
Car dealership groups have already been forced to cut thousands of jobs, with Lookers making 1,500 redundancies in June, Pendragon cutting 1,800 and Jardine Motors cutting 500. Another dealer, Inchcape, has said it will cut head office roles, although it has not yet provided numbers.
Mike Hawes, the SMMT’s chief executive, cautioned that the true picture of the challenge facing the industry would not be clear until after September, a key month for car buyers when number plates change.
“Although this month’s figures provide hope, the market remains fragile in the face of possible future spikes and localised lockdowns as well as, sadly, probable job losses across the economy,” Hawes said. “The next few weeks will be crucial in showing whether or not we are on the road to recovery.”
