The lockdown and coronavirus crisis cost the UK car market 600,000 cars in lost sales – but dealers are rapidly making up for lost ground.
More than £20bn worth of car sales never happened due to the pandemic and while dealers are enjoying a sustained period of recovery the supply of new cars could hamper the recovery.
That’s the view of Cox Automotive who have released a wide ranging and detailed look at the car market.
The report expects a ‘W’ shaped recovery for new car sales – with 2020 finishing down around 24 per cent to 1.71m sales.
At the start of the year, new car sales were expected to hit 2.27m this year.
The SMMT is slightly more pessimistic in its prediction that new car sales will be down nearly 31 per cent at 1.6m this year.
Analyst Philip Nothard said: ‘The actual recovery will be determined by whether there is sufficient consumer demand and how many vehicles can be supplied.
‘Order take is healthy across the network but concerns remain regarding supply as manufacturers focus on maximising the 2020 recovery ahead of the threat of tariffs.’
The used car market – hugely buoyant at the moment – will also be down overall by 17 per cent this year, says Cox, despite the post lockdown recovery being very strong.
Used car values are currently ‘unseasonably strong’ and are at their highest point since the 2009 financial crisis recovery, up 10.4 per cent year to date.
‘There has been less impact on the used market than new as it is not reliant on a production that was already constrained,’ added Nothard.
The Cox report does warn there is a ‘challenging’ road ahead as unemployment is expected to rise sharply from 3.9 per cent to closer to nine per cent with 695,000 people losing their jobs since the lockdown.
It also says this comes at a time car dealers are coping with the emergence of new trends and buyer behaviour including a ‘cautious’ approach towards finance.
Cox says there will be an acceleration of consumer trends seen before the pandemic including a move towards subscription car ownership models and different attitudes towards fuel type.