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Showrooms staying closed until April 12 is disappointing but not a disaster, says industry expert

Time 3 months ago

Showrooms not being allowed to open again until at least April 12 is disappointing but not a disaster, according to one industry analyst.

Director of Insights at Cazana, Rupert Pontin, pointed out in his latest report that while waiting even longer to reopen showrooms will be difficult the industry has come on leaps and bounds since March last year.

He also predicts that while this will result in a poor March there will be pent up demand ‘that has been growing since early December when the regional lockdowns began’.

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Pontin was also positive about the reduced impact of the second and third lockdowns.

‘The impact of the second and third lockdowns whilst evident in the chart, are much milder than before,’ he said.

‘It is also interesting to note that for the month of January 2021 used car sales levels are remarkably similar to January 2020 which is good news.’

He added: ‘While the news of reopening the retail showrooms in April 2021 is a disappointment it is not the disaster that it could have been or as bad for the industry as the first Lockdown was.’

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However, the Cazana director also commented on the downturn in new car sales.

Pontin commented: ‘One of the other major concerns for the coming weeks is what will happen with the new car registration month of March.

‘New car sales have been on a downward journey over the last 12 months and the beginning of 2021 is no different.

‘However, January 2021 registrations were down by 39.5 per cent and will also be down for February unless there is a significant activity this week.

‘As such it is logical to expect that March will be poor too, although the consensus is that these registrations will come in greater volume after the retailer showrooms reopen in April.’

He added: ‘However, it does raise a question as to why used online car sales appear to be easier to transact, than new cars at the moment.

‘There are two reasons for this. Firstly, there is a significant possibility lockdown is masking new car supply issues rather than reflecting actual demand and secondly that for some reason the customer does not trust buying a new car solely online.

‘If true, the second point is fascinating as there is no logical reason behind why a customer should trust a new car less than a used car or is it because of the marketing message and profit opportunity.’

Rebecca Chaplin's avatar

Rebecca has been a motoring and business journalist since 2014, previously writing and presenting for titles such as the Press Association, Auto Express and Car Buyer. She has worked in many roles for Car Dealer Magazine’s publisher Blackball Media including head of editorial.

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