UK monthly car sales rise for first time this year


Monthly car sales in the UK increased for the first time this year in July as the reopening of showrooms after lockdown released pent-up demand, although analysts cautioned that the recovery may be shortlived.

New car registrations last month increased 11.3 per cent year on year, according to the Society of Motor Manufacturers and Traders. However, Mike Hawes, SMMT chief executive, warned that such increases were unlikely to be sustained.

“While July’s growth is undoubtedly good news, this is largely due to pent-up demand following showroom closures through the spring, so the growth should be treated cautiously,” he said.

“Understanding the true levels of underlying consumer confidence will take a little longer.”

A total of 175,000 new vehicles were registered in the UK in July, the SMMT said. This followed months of pain for the UK industry, with car sales plummeting more than a third in June and by 89 per cent in May. In April, sales fell 97.3 per cent, in the sector’s worst month since 1946

Demand for new cars is still 40 per cent lower for the year to date compared with the same period in 2019, according to the SMMT. The industry body expects a full-year drop in registrations of 30 per cent in 2020. 

Some industry figures were more bullish about car sales remaining strong after pre-lockdown demand had worked its way through the system.

“Before lockdown had even ended, consumer demand was jumping forwards to levels well ahead of last year,” said Ian Plummer, director of online car sales portal Auto Trader. 

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“There are even signs that demand is healthier now than it was pre-Covid,” Mr Plummer added, noting that Auto Trader had a record 64.3m visits to its website in July, an increase of 23 per cent year on year.

Car dealerships in London are reporting a new breed of customer, nudged towards car ownership by the limitations on public transport during the coronavirus lockdown.

Despite 650,000 Britons in full-time work having lost their jobs since the start of lockdown in March, UK households’ balance sheets have strengthened overall throughout Covid-19 as those who remain fully employed have had fewer opportunities to spend.

Net consumer credit fell a record £7.4bn in April and household deposits increased £16.2bn, in contrast to an average rise of £5bn over the preceding six months. 



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