Deloitte comments on SMMT new car registration figures has been saved
Deloitte comments on SMMT new car registration figures
5 May 2020
Michael Woodward, UK automotive lead, Deloitte, said:
“New car sales in April declined by 97 per cent compared to the same period last year. Only 4,000 cars were registered in the month, the lowest monthly level in over 70 years. In light of ongoing lockdown measures, these figures are not unexpected.
“Whilst UK lockdown restrictions are yet to be eased, when they are this could spark a recovery in sales. Early signs from China suggest some consumers have purchased either low-cost second hand vehicles or entry-level new cars to reduce public transport usage.
“The recovery in China was likely helped by the fact that more car purchases are made online. As restrictions in the UK are lifted, some consumers may prefer to purchase online, accelerating the need for dealers and manufacturers to digitise their interactions.
“For UK consumers, as showrooms begin to reopen it could also be a good time to find a bargain. Manufacturers have significant inventory of cars ready for sale, but may be struggling with their cash flow. As a result, big discounts may reappear on the forecourt in the short-term, not only to release inventory but also get the supply chain moving again.
“When factories reopen, efficiency and productivity is unlikely to return to pre-lockdown levels immediately, as businesses accommodate the need for social distancing measures in plants, for example.
“Significantly, whilst the rest of the market saw sales fall by over 90 per cent, battery electric vehicle sales only fell by 10 per cent in April, achieving a market share of 32 per cent.”
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