New car registrations have risen for the first time since the start of the Covid-19 pandemic, with 283,964 new vehicles hitting UK roads in March – 29,280 more than for the same period in 2020.
This first sign of growth is positive news for the industry, albeit with the caveat that sales tumbled by 44.4% in March last year as the country entered its first lockdown.
Dealerships reopened on Monday for the first time since early January, when non- essential retailers were forced to close their doors once again in response to an alarming rise in infections. The Society of Motor Manufacturers and Traders (SMMT) warns that the latest figures are still 36.9% down on the 10-year March average, and that the shortfall in the first quarter of this year has already cost the industry around £1.8 billion.
“The past year has been the toughest in modern history and the automotive sector has, like many others, been hit hard,” said SMMT chief executive Mike Hawes. “But a strong and sustainable market is possible if customers are attracted to the choice and competitive offers the industry is able to provide within the safest of showroom environments,” Hawes added.
Autocar spoke to Robert Forrester, CEO of dealership chain Vertu Motors, about what the industry can expect now that dealerships are up and running once again.
Are you optimistic for the future?
“I think we should feel pretty optimistic. I think March was actually a successful month, really for the sector. Yes the new car market private was down four per cent, but bear in mind no one’s been in a showroom or had a test drive for three months. I thought that was a near miracle, actually.
"The headline ‘the new car market was up’ was really fleet wasn’t it, because last year’s fleet volumes were much curtailed by the final week of closure. So I wouldn’t read too much into that. But I would certainly read a couple of things into the strength of the new car market in March. One is… accidental savers. I actually think a lot of people in employment have actually saved a lot of money, and new cars are something they spend their money on.
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I agree with most of this article and opinion. There will always be a need for customers to try cars before they buy and a need for dealerships to do that plus all the dirty work like servicing, warranty and recalls.
There has certainly been a shift to more internet advertising and pre-sale viewing of new and used cars, but that final deal closing and (metaphorical) handshake, is better done face to face.
Whether that shift will bring in fewer but super-sized multi-brand dealerships, or a resurgence of smaller less salubrious ones of old, I don't know (though I suspect the former).
While dealer groups are claiming good margins, I will still be in there, haggling hard for great deals, and hoping the future is not hijacked by manufacturers fixing prices by selling only online.
Finally someone with common sense. I have to agree with just about everything that CEO says. There is one caveat tho and that concerns the price of cars. Yes the discounts and offers will still be there but it''s the actual list price of the cars that's the worry. Even if you have been saving more, it won't be long before it's wiped out when signing the dotted line.
Throughout my life I've been one of those people who's changed their cars every 2-3 years but given the cllimate of eye watering list prices and the uncertainty over electrification, I have no intention of changing our current vehicles for many years. Plus, that £40k list price luxury car tax played a massive part in the cars I considered buying. That limit or it's 6yr existance really needs to be revisited.