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UK car sales pick up after six-month slump

Saleha Riaz
·3-min read
Click and collect provided a lifeline for the sector amid pandemic restrictions. Photo: Getty Images
Click and collect provided a lifeline for the sector amid pandemic restrictions. Photo: Getty Images

The UK new car market recorded its first growth since August 2020, with 29,280 more units registered during March compared to the same month last year, new data revealed.

The Society of Motor Manufacturers and Traders (SMMT) said click and collect provided a lifeline for the sector amid lockdown restrictions, thanks to manufacturers and their networks investing in digital channels.

“Click and collect does not, however, offer the consumer the same experience and excitement as a showroom environment. With dealerships reopening their doors next week, customers can look forward to choosing and configuring a new car, safely, in person from the wide choice available, as dealers attempt to recover some of the £22.2bn [$31bn] lost in turnover since March 2020,” the report noted.

While overall registrations were slightly up compared with last year, growth came almost entirely from fleets, which saw a 28.7% increase in registrations.

Chart: SMMT
Chart: SMMT

“With today’s figures showing an 11% rise in new car registrations – the return of customers to forecourts points to a brighter spring and summer for the industry – with all indicators suggesting the traditional March sales surge will take place this month," noted Karen Hilton, chief commercial officer at heycar.

 “Yet, while we continue our slow return to normality – on the continent coronavirus remains rampant – which continues to have a significant impact on new car production, causing widespread delays on factory orders and bespoke builds. Therefore, for those wanting as-new models, the used car market remains their only option – where they can make significant savings on pre-registered stock," she added.

While the figures were a vast improvement from January, when Britain suffered its weakest January car sales in 51 years as showroom closures brought the market to a near standstill, it was not all positive news.

Compared with the 2010 to 2019 March average of 450,189, registrations were down 36.9%, with 283,964 units registered.

So far, 2021 has seen 58,032 fewer cars registered compared to January to March last year, equivalent to a loss of £1.8bn ($2.5bn) in turnover during the first quarter.

For the sector to return to its pre-pandemic levels, around 8,300 new cars will need to be registered every single trading day for the rest of the year, SMMT said.

By comparison, the industry has averaged around 7,400 a day during the past decade and current levels are closer to 5,600 a day.

READ MORE: Business chiefs call for decisive action on UK COVID passports

Retail consumer demand remained depressed, falling by 4.1% compared with March 2020 as showrooms remained closed for the duration of the month.

Meanwhile, the shift to new technologies is continuing, with plug-in vehicle demand reaching its highest ever volume.

Registrations of battery electric vehicles increased by 88.2% to 22,003 units, while plug-in hybrid electric vehicles rose by 152.2% to 17,330. 

Mike Hawes, SMMT CEO, said: “With showrooms opening in less than a week, there is optimism that consumer confidence – and hence the market – will return.

“We know we will see record breaking growth next month given April 2020 was a washout, but a strong and sustainable market is possible if customers are attracted to the choice and competitive offer the industry is able to provide within the safest of showroom environments.” 

Alex Buttle, director of Motorway.co.uk, said that "although positive March figures will be a welcome relief after some disappointing numbers in January and February, enthusiasm needs to be tempered a little."

He added: "The real game changer for new car sales should come from 12 April, when car showrooms can open their doors to the public again. Showrooms opening can’t happen soon enough for the new car industry to take off, especially with electric vehicle purchases showing real traction for growth in 2021."

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