Insight

Lockdown-3 Stalls UK Car Sales

Jayson Whittington | 08 Feb 2021

About the author

Jayson Whittington

Chief Car Editor

Jayson joined Glass’s in March 2014 as Leisure Vehicle Editor before being quickly promoted to Leisure & Commercial Vehicle Valuation Manager. He's more recently taken on the role of Chief Car Editor. Jayson has worked in the motor industry for over 20 years across numerous sectors for a manufacturer, a dealer group, an auction house and used car supermarket. Jayson is a contributing author for Autovista24.

Glass's trial

Lockdown-3

Unsurprisingly, the latest national lockdown has affected new car sales. Registrations fell 39.5% compared to January last year, according to figures released by the Society of Motor Manufacturers and Traders (SMMT).

The latest indications from the Government suggest a gradual unlocking of the economy once schools have reopened. The Government have already confirmed this will not be earlier than March 8. When schools start reopening, they will reopen in phases enabling student COVID-19 testing.

Following the schools reopening, it remains unclear which sectors of the economy will reopen first, whilst some businesses may not reopen until April at the earliest.

It will be damaging for new car registrations if dealerships do not physically open in March. Usually the largest registration month of the year, March is a pivotal month for the new car market. However, with dealers physically closed in January and February, the outlook for March was already bleak.

The used car market also suffered in January with dealers limited to offering ‘click and collect’ services. As a result, wholesale activity has been relatively poor, with dealers seldom needing to replenish their stock.

The Glass’s editorial team watched over 20 online auction sales in January. They report that despite low numbers of auction entries, conversion rates were only around 50%. Overall, the percentage of cars sold at the first time of asking was 77.8%. This result is over nine percentage points lower than last year.

Looking ahead to the rest of the year it is difficult not to be pessimistic about the new car market. A prediction of around 2 million cars seemed sensible just six weeks ago. This prediction is already at risk with March’s usual high registration total under threat. Glass’s expects an increase in used car activity when Lockdown-3 ends, it may not be quite as buoyant as when Lockdown-1 ended but should help dealers recover some of the ground lost in quarter one.

UK registrations stall in November as second lockdown takes effect

04 Dec 2020

UK new-car registrations fell by 27.4% year-on-year in November, as a second lockdown came into effect, closing dealerships and hampering sales. New data from the Society of...

Dealer sales restricted in half of Europe’s car market

27 Jan 2021

Europe’s car dealers continue to face COVID-19 restrictions, with dealerships in some markets currently closed, except for servicing, maintenance and repair (SMR) work and online...

Yes, sign me up to Autovista24