New cars sales in UK rise as dealerships reopen

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
·2-min read
THURLEIGH, BEDFORDSHIRE - JUNE 09: Thousands of unwanted new and used cars line up on June 09, 2020, at Thurleigh Airfield in Bedfordshire. Britain's economy slumped by 20.4% in April in the biggest monthly decline since records began as the coronavirus lockdown paralyzed the country. (Permission from Aerodrome for flight). (Photo by Chris Gorman/Getty Images)
There was an 11% increase in new car sales in July, compared to a year before. Photo: Chris Gorman/Getty Images

New car registrations in the UK increased in July for the first time this year, after lockdowns lifted and dealerships fully opened again.

The July data from Society of Motor Manufacturers and Traders (SMMT) shows an 11.3% increase in new car sales last month, to 174,887 units, compared to the same month last year.

However, demand is down 41% for the year to date, the forecast is for a full-year drop in demand of around 30%, totalling £20bn ($26.2bn) in lost sales, the SMMT said..

“July’s figures are positive, with a boost from demand pent up from earlier in the year and some attractive offers meaning there are some very good deals to be had,” SMMT chief executive Mike Hawes said. “We must be cautious, however, as showrooms have only just fully reopened nationwide and there is still much uncertainty about the future.”

Carmakers in the UK suffered their worst sales slump since the year after World War II in April and May — just 197 cars were produced in April and 5,314 in May.

New car registrations, which had all but ground to a halt in April and May due to coronavirus lockdowns, had already started to pick up a little in June, although they were still almost 35% lower than in June last year, with 145,377 new cars registered.

Ford Britain managing director Andy Barratt, told the BBC that while he was pleased to see a rise in consumer demand, “I don't think this is a long term indication of a V-shaped recovery.”

READ MORE: Coronavirus sales slump drives BMW to a second quarter loss

“I think that there will be reasonable demand through September, when the registration plate changes, but without government intervention this sector won't recover until at least the middle of next year,” Barratt told the Today programme.

SMMT chief executive Mike Hawes warned in June that one in six auto industry jobs in the UK could be at risk when the government’s furlough scheme ends in October. He called on the government for a specific restart package to safeguard against jobs losses, and help boost recovery for the sector.

Listen to the latest podcast from Yahoo Finance UK