New car registrations fell last month to pre-2000 levels as the market saw its worst September performance since the switch to a twice-yearly registration mark.
Data from the Society of Motor Manufacturers and Traders (SMMT) showed just 328,041 new cars were registered last month - 15.8 per cent down on the 10-year average and the lowest volume since 1999.
August is traditionally a quieter month, ahead of the new registrations being issued in September but September 2020 saw a 4.4 per cent drop compared with the previous month, itself down 5.4 per cent, as the industry continues to struggle post-lockdown following a brief surge in July.
Mike Hawes, chief executive of the SMMT warned that the short-term future of the industry looked “very challenging”.
Following the collapse of the new car market during lockdown, some observers had predicted that September would bring an upsurge as buyers opted for a new 70-plate car. However, economic uncertainty and fears around future job losses appear to have badly affected interest in new cars.
The SMMT estimates that the new car market will have declined by 30 per cent by the end of the year - equivalent to £21.2 billion in lost sales.
Mike Hawes, SMMT chief executive, said, “During a torrid year, the automotive industry has demonstrated incredible resilience, but this is not a recovery. Despite the boost of a new registration plate, new model introductions and attractive offers, this is still the poorest September since the two-plate system was introduced in 1999.
“Unless the pandemic is controlled and economy-wide consumer and business confidence rebuilt, the short-term future looks very challenging indeed.”
Dealers have struggled to revive sales since lockdown (Photo: Shuttestock)
Within the new registrations, pre-existing trends continued with diesel sales continuing to plummet - down 38.4 per cent on last year - and EV and hybrid sales rising. Pure EV registrations were up 184 per cent on September 2019 and accounted for 6.7 per cent of all new registrations, compared with 2.2 last year. Plug-in hybrid registrations wee up 136 per cent while mild petrol hybrids jumped 4422 per cent as growing numbers of car makers introduce the technology to their mainstream models.
James Fairclough, CEO of AA Cars, said the figures pointed to a gradual and inconsistent recovery for the industry.
He commented: “September is traditionally one of the busiest months in the calendar for dealerships because of the introduction of new plates, and so it’s a great disappointment that there was no increase in sales at a time which usually sees high demand.
“Dealerships are frantically playing catch up for the months of sales lost during lockdown. Even though many have made great strides over the summer, the winter months will be decisive in determining how sustainable the momentum is.”
Alex Buttle, director of car selling website Motorway.co.uk, added: “With buyers being understandably cautious, and ongoing supply issues with many manufacturers struggling to get back up to speed following Covid-19 factory lockdowns, the new car market is now likely to remain fragile for the rest of 2020.
“A reversal in fortunes in the short to medium-term seems improbable, especially with thousands of jobs on the line when the Government’s furlough scheme ends this month. Buying a big ticket item such as a new car will probably be put on the back burner for many people if unemployment becomes a serious UK-wide issue.”