Car retailers reported that demand from car buyers left pent-up during the COVID-19 lockdown period had resulted in a bumper return to showroom trading on June 1.
Vertu Motors chief executive, Robert Forrester, reported that his UK businesses had succeeded in selling 426 cars on the opening day of trading proper since March 24’s lockdown order from Prime Minister Boris Johnson as others also raced out of the blocks.
Taking to Twitter to celebrate the result, he said: “This looks like a great first day for the Group!”
At Swansway Group, director Peter Smyth was also celebrating levels of trade “significantly up on normal trading”, having sold 33 new and 49 used cars to retail customers yesterday – at more than £2,000 profit per unit.
New car registrations in Europe fell from 1.34 million units in April 2019 to 292,600 vehicles in April 2020, representing the lowest monthly level since the 1970’s.
This is also the worst result among the big three markets – China, USA-Canada, and Europe. Europe’s sharp decrease was only outperformed by India (-100%). But data from JATO shows that electrified vehicles continued to gain traction.
Their registrations totalled 50,400 units, making up 17% of total market share. Demand fell by 46% compared to April 2019 but it was mostly due to the hybrid cars, which saw a decline of 66% to 18,900 units.
Pure electric cars registered a decrease of 29% to 16,700 vehicles, while Plug-in hybrids saw almost 14,000 new clients, up by 7%.
Levels of digital enquiries for new and used cars spiked in late May, as dealerships prepare to open their doors for the first time in over two months, according to Dealerweb.
Digital enquiries into dealers across the UK during May were only 16.5% behind 2019 levels. It marked a significant improvement from April, which saw a drop of 61.5% on 2019.
Levels of telephone enquiries have not recovered at the same pace despite many dealerships staffing customer service lines. April saw a 95.5% decline in enquiries against 2019 and May experienced an 80% drop.
Sue Robinson, director at the National Franchised Dealers Association (NFDA), added: “As lockdown measures start to ease, many of us will need cars to get back to work and it is crucial that automotive retailers are open to serve the workforce. They have been working hard to put all the necessary measures in place to ensure social distancing can be observed, and we look forward to welcoming customers back into showrooms.”
The National Franchised Dealers Association estimates 590,000 people worked in automotive retail before the crisis; the vast majority were furloughed, and rough estimates suggest that as many as 25% are facing redundancy as lockdown lifts.
Make no mistake, this is a sector in crisis. How deep that crisis is depends on the bounceback, which begins today as showrooms and dealerships are permitted to open for the first time since late March.
Estimates now suggest that the UK’s new car market will be down 25% this year, accounting for around half a million lost registrations. Is there any hope? We may be clutching at straws here, but some markets that have already gone through the crisis have rebounded well; notably, though, these include China and South Korea, which (officially, at least) dealt with the impact far more effectively than the UK.
JudgeService has found that the majority of customers are happy to visit car showrooms in person if COVID-19 safety measures have been put in place. The online customer review provider surveyed people who bought a car in May last year (2019) or the year before (2018) and received 700 responses - many of which indicated a willingness to shop in showrooms once again.
After car dealerships re-opened their doors to customers yesterday (June 1), retailers told AM that initial trading was strong, with walk-in customers happy to pay them a visit. The results of JudgeService's survey found that around 20% of respondents identified as being at high-risk of getting ill from coronavirus and were more reticent about visiting dealerships. However, nearly 22% of them said they would be happy to do so in person if social distancing rules were observed, with this number rising to nearly 35% among those who were not at risk.
The company found that people’s propensity to change their car was not significantly affected by the coronavirus crisis, as nearly a fifth (19.08%) of respondents said they would have changed their car within the next 12 months under normal circumstances. When considering whether they would change their car in the current situation, this figure dropped only slightly to 16.82%.