At last there is some positivity to report in the new car market, with July registrations recording the first increase of the year. Registrations came in at 174,887, which represents an 11.3% rise on the same month last year, according to figures released by the SMMT. This was the strongest July performance since 2016.
Although fleet registrations accounted for the lion’s share of the market (52.5%), it was private registrations that demonstrated the most growth, with a 20.4% increase. Dealers being open for business for the whole month of July will have helped fulfil the pre-order backlog caused by the COVID-19 lockdown, together with improvements in the supply chain. There is also some pent-up demand generated by consumers who managed to save throughout lockdown, and are taking advantage of some competitive offers and incentives from manufacturers and dealers.
Data courtesy of SMMT
Growth was weaker in the fleet sector, with a 5.2% improvement on this time last year to 91,857 units, as both longer term and short cycle business struggles to pick up. At the same time, coronavirus uncertainty continues to hamper business expenditure decision making, and working practices for their employees, which may affect leasing deals going forward. Although, if there is continued improvement in the economy, back to something like pre-lockdown levels, then expect to see a strong new car order book as confidence improves and lease deals currently being extended end.
Alternative fuel cars (AFVs) are still gaining market share at a fast pace, with battery electric vehicles (BEVs) up 259.4% and Plug-in hybrids (PHEV) gaining 320.3% compared to July last year. BEVs now make up nearly 5% of this year’s total new car registrations compared to only 1.4% last year, while all other AFVs are also increasing market share, albeit to a slightly lesser extent.
The best sellers list has returned to some sort of normality this month, with small to medium sized cars filling the majority of the top ten as deliveries get back up to speed. The Vauxhall Corsa, Ford Fiesta and Ford Focus fill the top three places respectively. Volkswagen has three entrants, the Golf, Polo and Tiguan. The Mercedes A-Class, the Nissan Qashqai, Ford Kuga and MINI also feature.
August is usually a quiet month for new registrations with summer holidays in full swing, but with getaways curtailed this year, a similar monthly registration increase could be possible and would be beneficial but not crucial to the industry. The acid test will be the September 70-plate change. This is ordinarily the second most important month of the year and therefore a healthy increase in registrations would certainly go some way to keep the recovery on track.