New car registrations have risen for the first time since the start of the Covid-19 pandemic, with 283,964 new vehicles hitting UK roads in March – 29,280 more than for the same period in 2020.
This first sign of growth is positive news for the industry, albeit with the caveat that sales tumbled by 44.4% in March last year as the country entered its first lockdown.
Dealerships reopened on Monday for the first time since early January, when non- essential retailers were forced to close their doors once again in response to an alarming rise in infections. The Society of Motor Manufacturers and Traders (SMMT) warns that the latest figures are still 36.9% down on the 10-year March average, and that the shortfall in the first quarter of this year has already cost the industry around £1.8 billion.
“The past year has been the toughest in modern history and the automotive sector has, like many others, been hit hard,” said SMMT chief executive Mike Hawes. “But a strong and sustainable market is possible if customers are attracted to the choice and competitive offers the industry is able to provide within the safest of showroom environments,” Hawes added.
Autocar spoke to Robert Forrester, CEO of dealership chain Vertu Motors, about what the industry can expect now that dealerships are up and running once again.
Are you optimistic for the future?
“I think we should feel pretty optimistic. I think March was actually a successful month, really for the sector. Yes the new car market private was down four per cent, but bear in mind no one’s been in a showroom or had a test drive for three months. I thought that was a near miracle, actually.
“The headline ‘the new car market was up’ was really fleet wasn’t it, because last year’s fleet volumes were much curtailed by the final week of closure. So I wouldn’t read too much into that. But I would certainly read a couple of things into the strength of the new car market in March. One is… accidental savers. I actually think a lot of people in employment have actually saved a lot of money, and new cars are something they spend their money on.
“I actually think the April market will be quite strange, but if you look at the reopening of Scotland – which reopened on Monday – we did see an increase in business from Monday onwards. Our Scottish dealerships on Monday were very much top of our league in sales. Because people have been holding off wanting test drives, which is fairly obvious really, particularly on new cars and new powertrains, electric vehicles and things like that. So we fully anticipate being busy in England when we kick off on Monday.”
Are there lots of people who no longer need cars due to home working?
“No, I don’t think so. This fad for home working is a very temporary phenomena. It might be different in the home counties and London, but even so I think most employers want their people back more often than not. And if you get out of the London [innovation?] the world is going to quickly revert back to normal. And cars are going to be very much in demand I think.
“So the answer is ‘you’ve got to have bricks and clicks’, and I feel quite comfortable that assuming that we’re competent, assuming we have high levels of productivity gained through technology, and assume we have the right franchise partners, I’m optimistic about the franchise model actually for the next 15 years. The pandemic will not bring on the death of the dealership. Quite the reverse, the future is dealerships. Who owns them is a different question, and certainly Cazoo and Tesla have voted with their feet and clearly got dealerships.”