It doesn’t matter which way you cut it: the past year makes grim reading for the car industry. Whether you look at sales or manufacturing, the numbers are all down, with the ongoing effect of the coronavirus pandemic and the rolling programme of lockdowns and restrictions creating uncertainty for consumers and businesses alike. So it isn’t an understatement to say the full reopening of dealerships on 12 April can’t come soon enough.
How bad has it been? You don’t have to look far for an answer. The Society of Motor Manufacturers and Traders estimates the industry as a whole suffered a staggering £23 billion loss in the year since prime minister Boris Johnson announced the first national lockdown at the end of March 2020. As for sales, over the course of 2020 there were 1.6 million new car registrations, nearly a 30% drop on 2019’s figure.
Yet these numbers are arguably skewed heavily by the early days of the pandemic, when manufacturers and retailers essentially shut up shop during the first lockdown. This time, they have continued trading, both face to face and, as of the start of 2021, digitally.
Different restrictions and valuable lessons learned mean companies are fighting back and business is building. “We have been operating throughout,” Eurig Druce, managing director of Citroën UK, told Autocar. “While showrooms have been closed, customers have been able to buy online if that suits their needs, so we don’t see the market having the huge bounce back seen last July. There are also many people that are uncertain about how the pandemic will affect their jobs in the long term. Therefore, we are anticipating a slight increase this year in new car sales of approximately 12% from 2020.”
The idea that there won’t be a flood of customers through the doors is backed by Robert Forrester, CEO of the Vertu Motors Group. “We’re already operating at between 70% and 90% of normal sales volume, even before the doors are reopened,” he told Autocar. “There is still some pent-up demand from buyers who will want to get into the showroom on 12 April, but nothing like the same uplift as we experienced after the first lockdown.”
The rapid adoption of online technologies has played its part in the industry being able to reclaim some of the ground lost during the first lockdown. Click and collect, home delivery and money-back guarantees are also used industry-wide, while video calling with personalised guided tours of cars are offered by almost every manufacturer and dealer.
Yet despite the constant background noise of digital revolution and disruption by innovative online retailers, the use of this tech looks to be enhancing the traditional sales model rather than replacing it.
“We’ll never go back to where we were,” said Forrester. “Technology has moved on and the customer has moved on, but that’s not to say everyone is now buying purely online. That’s still a very small market.”
However, there’s greater optimism from car makers, who have been adapting quickly to the changes wrought by the pandemic. “Adjusting our manufacturing plants to be Covid secure in the early days of the pandemic was a major challenge,” said Willcox. “But it’s one we are now experienced with and that approach to safety extends all the way from manufacturing to our supply chain. We have enough stock in place for the initial demand we anticipate and the ability to source what we need from our production plants in line with customer expectations.”
For consumers and the wider public, the 12 April lifting of restrictions has taken on great significance. But for the car industry and its retailers, the months of planning and preparation mean that while things will be different, it should also be business as usual.
I bought a car in a 5 minute phone call
Autocar spoke to a buyer who had taken the plunge and ordered a new car during the most recent lockdown. Much of the research was done online but the final deal was closed over the phone.
“The plan was to get a plug-in hybrid BMW X3, but there was no availability until September,” the buyer said. “The kids totally rejected a 530e. The idea of not having an SUV was horrifying to them! In the end, we settled on an X3 M Sport 20i, which was £170 a month cheaper than the hybrid, the salesperson explaining that the speed of electric developments is pushing the residual values down as everyone’s nervous about how dated the car will seem in three years.
“The difference in value between the two after three years was £1800, yet the hybrid’s list price was £7400 more. Once on the phone, the whole deal was concluded, including the finance deal, in just five minutes, the car undriven and unseen, based around what I’d read on What Car? and Autocar.”