Wales lockdown wipes off a quarter of new car sales

The firebreak lockdown has wiped 25% off new car sales in Wales, revealed figures from the Society of Motor Manufacturers and Traders.

It is a warning to England which has just gone into a month’s lockdown as opposed to the fortnight shutdown in Wales which ends on monday after 3,677 new cars were sold by Welsh dealers in the three weeks they could open last month.

These contrasted with a rise of almost 25% in Scottish new car registrations over the same period.

Dealers have taken a significant hit as a result of Covid-19 and had to adapt their sales strategies in response to the pandemic; two in three (66%) introduced a delivery service or increased publicity of an existing service, and half (50%) adapted their social media offering

The pandemic has had a significant impact on dealers’ finances with two fifths (22%) having to take out finance or additional finance to stay afloat, and 15% had to let staff go

Despite this, 89% of car dealers are confident in the business outlook of their firm in the next 6 months

But it’s not all doom and gloom said Seán Kemple, Managing Director at Close Brothers Motor Finance.

“It’s not been an easy ride for the motor industry and, unfortunately, there’s more trouble over the hill. October is typically a harder month for sales in the new car market, and this year the industry is facing persistent challenges that are slowing recovery and hindering growth. Consumer demand is strong, but production remains slow. The national lockdown, coupled with looming Brexit changes that will potentially push up the costs of cars, sets the scene for a difficult few months,” he said.

“But there is a diamond in the crown of coal. It’s a pivotal moment in the electrification of the UK car market, and consumers are driving the change toward greener roads. Electric vehicles now hold over 35% share of total new car registrations and rapid growth means we could hit 400,000 total electric and hybrid new cars sold by the end of the year”.

In October, private demand was stable, up 0.4%, whilst fleet declined -3.3%. Sales of battery electric vehicles rose by 195.2% and plug-in hybrids grew by 148.7%. Diesel saw a decline of -38.4% and petrol was down -21.3%.

Sue Robinson, Chief Executive of the National Franchised Dealers Association, said, “It is encouraging to see the continued, strong growth in the battery electric and plug-in hybrid vehicle segments. Over the past months, dealers have experienced large volumes of online enquiries and we expect this to continue through November.

“Dealers will continue to comply with the regulations to arrange the delivery of cars and, where possible, meet customers’ aftersales servicing needs, in particular, to support key workers and all those who need a car to go to work or for other essential needs.

“Vehicle showrooms were the first industry sector to reopen on 1 June, operating to Covid-secure guidelines. There is no evidence that dealerships have caused the spread of Covid-19 and shutting showrooms for four weeks can damage the livelihoods of the 590,000 people employed in vehicle retail as well as the 168,000 people employed in vehicle manufacturing”.