UK car sales stumble again, erasing hope of quick recovery

LONDON • UK car sales fell for a second straight month, sliding 4.4% in the country’s weakest September for auto purchases in more than two decades.

Registrations dropped to 328,041 cars, according to data from the Society of Motor Manufacturers and Traders (SMMT). That follows a 5.8% decline in August and dashes hopes for an early recovery from a coronavirus-driven slump.

The figures are especially disappointing because September is usually a key month for UK auto retailers, with a change of year on licence plates spurring purchases. The decline makes for the worst September since the two-plate system was introduced in 1999, the SMMT said. It also follows decreases in France and Spain, adding to the likelihood sales fell during the month across Europe.

“There was a lot of expectation that September would be the month that pent-up demand would finally boost the new car market with knockout numbers,” said Alex Buttle, director at online car retailer Motorway Online Ltd. “It looks like we’ll have to wait for headier times.”

The new car market “is now likely to remain fragile for the rest of 2020,” he added, citing buyer caution and ongoing supply issues with many manufacturers struggling to get back up to speed following Covid-19 factory lockdowns.

Car registrations in July brought the first monthly sales gain of the year as showrooms reopened following months-long lockdowns, and spurred expectations of a recovery. While that provided some relief as the industry cut jobs and capacity to weather the pandemic, the latest numbers suggest the pent-up demand was a blip.

The percentage drop was limited by sluggish sales in September 2019, with the dip stretching to 16% when compared with the 10-year average, according to the SMMT. The industry is facing more than £21 billion (RM113.4 billion) in lost revenue by the end of the year, the group said.

“Unless the pandemic is controlled and economy-wide consumer and business confidence rebuilt, the short-term future looks very challenging,” said Mike Hawes, the CEO of the SMMT in a statement. — Bloomberg

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