February’s new car figures may have been the worst since 1959 thanks to lockdown, with sales down to 51,312, but industry figures are looking beyond that and say there is much cause for hope.
Resilience and adaptability
Rachael Prasher, managing director, What Car?
‘February’s registration figures from the Society of Motor Manufacturers and Traders once more show the resilience and adaptability of the market, with retailers having to operate another month behind closed doors.
‘Online retail and new digital platforms have proved an effective solution to meet the most urgent demand, but the February results once again show the pressing need to safely reopen showrooms.
‘With dealers having to keep doors closed through the March plate change, when a fifth of all annual registrations are traditionally completed, all the signs are pointing towards a need for retailers to be ready to satisfy pent-up demand that is building around the mooted April 12 reopening date.’
Hugely positive lessons
Karen Hilton, chief commercial officer, Heycar
‘While it’s little surprise that registrations remain down, there are some hugely positive lessons the industry can take from lockdown.
‘Chief among these is that the closure of forecourts has prompted the most significant shift in car-buying behaviour in a generation. The result has been that thousands more consumers have turned to online platforms to purchase a vehicle.
‘And as physical sites reopen from April 12, there is also a string of welcome economic indicators that consumer spending will bounce back too.
‘The Bank of England’s recent Monetary Policy Report predicted “a sustained recovery” throughout 2021 and revealed that savers had squirrelled away £125bn during the pandemic.’
Sales still to be made
Ian Plummer, commercial director, Auto Trader
‘Given the current restrictions, last month’s sizeable drop in new car registrations comes as little surprise.
‘And confirmation from the prime minister that forecourts will have to remain closed during the key sales month of March was disappointing, particularly amongst those that feel car dealerships have retail environments which are at least as safe as others that have been permitted to remain open.
‘It’s important to note, however, that online sales are still permitted, and the fact most retailers are currently performing at around 70 to 80 per cent of normal new and used car volumes not only highlights the success retailers have made of their digital channels, but also that there are still sales to be made this month.’
Open road ahead
James Fairclough, CEO, AA Cars
‘After two months of nationwide lockdown, sales of new cars have slowed significantly, but last week’s confirmation that the restrictions will soon be eased hints at the open road ahead.
“Crucially, the government’s roadmap out of lockdown has given dealers something to plan for.
‘While their reopening dates are not set in stone, dealerships at least have the certainty they need to fine tune their sales strategies ahead of the market unlocking.
‘March looks set to be the last full month of lockdown, and dealers can now begin to look forward to a bumper April, which could see forecourts reopen and months of pent-up demand being released.’
Plenty of positives
Alex Buttle, director, Motorwasy
‘Now feels the time for the car industry to look forward. With dealerships able to open their showrooms to the public again in just over a month’s time, the new car market has an opportunity to roar back to life.
‘And there’s plenty of positives amongst the gloom of lockdown to suggest sales can enjoy a real bounce.
‘Brexit is firmly in the rear-view mirror, the government has presented its roadmap out of lockdown, dealers will be able to reopen from April 12, and there’s the new 21-reg plate in March to tempt buyers.
‘Also, with household spending down over the past year, some consumers will have saved up during the pandemic, allowing them to spend on a new purchase once we come out of lockdown.’
Karen Johnson, head of retail and wholesale, Barclays Corporate Banking
‘February is never the busiest month of the year for new car registrations, with buyers often holding out to ensure they can get their hands on the very latest number plates in March.
‘Lockdown has only further exacerbated this trend in 2021, and so new registrations have clearly fallen versus last year.
‘It’s not all doom and gloom for UK car dealerships though. The end of lockdown is in sight, and the planned reopening of non-essential retail will be a huge relief to many in the motor industry.
‘The new registration plate launching in March will also further spur consumer purchases in the coming months, and as consumer confidence grows, many will hope to see new car sales grow accordingly.’
Cash flow implications
Michael Woodward, UK automotive lead, Deloitte
‘We expect to see a major uptick in sales once showroom doors reopen, with dealers and manufacturers challenged with managing demand.
‘Much of the pent-up demand will stem from the clamour for new plates, usually seen in March.
‘While this will have a positive impact on sales in April, the loss of sales in March could lead to cash flow and planning implications for the industry.
‘The recent shortage of semiconductors has highlighted a problem in the automotive value chain and also needs to be managed accordingly.’
We are not alone
David Borland, automotive leader, EY UK & Ireland
‘February is typically the lowest month of the year in terms of sales so the impact of Lockdown 3.0 may not be as severe as for other months.
‘However, with current restrictions continuing throughout the whole of March and into April, the usual bumper third month of the year is likely to be significantly impacted as well.
‘As we have seen throughout the past 12 months, depressed sales is not just a UK issue.
‘We have seen similar declines in the EU, with Spain being one of the most challenged markets with a 38.4 per cent reduction from 2020. Germany also recorded a decline of 19 per cent, France 20.9 per cent and Italy 12.3 per cent.’
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