Analysis: Demand for new cars set to outstrip supply

As we stand on the cusp of a deep global recession sparked by a pandemic, it’s hard to imagine that you need to act fast if you want to buy a new car in the near future, both to get to the front of what will be a lengthy queue and to beat almost inevitable price rises. That, however, is the reality of the situation.

While the government has yet to lift nationwide lockdown restrictions, it recently sparked the car market back into life by confirming that dealerships can sell new cars online and deliver them, so long as they obey all social-distancing rules.

Strictly speaking, this wasn’t news: manufacturers had never been required to stop online sales, while some retailers had kept a handful of staff off furlough to do the same. And the lockdown rules have allowed travel to work if this is essential to your role.

Even so, the majority of the car industry – including pretty much all franchised dealers – reasoned that the need to stop the spread of Covid-19 eclipsed their desire to sell cars.

But the significance of the government’s statement on the rules of engagement shouldn’t be underestimated. It sparked extra traffic to the websites of Autocar and sister title What Car?, and within hours dealers were, according to our sources, scrabbling to take employees off furlough.

Those dealers are anxious to make arrangements to both deliver cars that had been bought but not collected prior to the lockdown and rebuild the pipelines of orders that are needed to keep them in business for the long term.

At the same time, the European car industry is starting to resume production; for instance, both Aston Martin and Jaguar Land Rover have announced plans to reopen some of their UK factories in the coming days and weeks.

Once new cars start rolling off the line again, the wider industry must get back to work, marketing, selling and more, to ensure these quickly find new homes rather than depreciate in fields and car parks.