UK new car sales nosedive by almost half in March as coronavirus hits

New car registrations in Britain fell by 44 per cent in March as the coronavirus crisis hit the economy and forced many would-be buyers to stay at home.

Sales totalled 254,684 units, making it by far the weakest March – which is typically one of the top two selling months of the year – since 1999 when bi-annual plate changes were introduced.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the statistics were ‘no surprise’, adding that we ‘should not draw long term conclusions from these figures other than this being a stark realisation of what happens when economies grind to a halt.’

The Prime Minister ordered a shutdown of much of the economy last month as his government sought to slow the spread of coronavirus.

This included the temporary closure of motor dealerships from the eve of Monday 23 March following Boris Johnson’s landmark announcement the same day.

While some manufacturers have continued to provide sales online, it comes as no shock that appetite for new vehicles almost entirely diminished in the final days of last month. 

Last year, March accounted for nearly 20 per cent of total registrations for 2019, as it is one of two annual occasions when a new licence plate series is issued.

The Covid-19 pandemic is the latest crushing blow to the sector, which has already been hammered by a drop in consumer spending due to Brexit uncertainty and the significant decline in diesel popularity following the emission cheat scandal in 2015.  

Car sales in Britain have, as a result, been falling since hitting a record high in 2016. 

The SMMT’s latest forecast, published in January, predicted a drop in full-year demand of just over 2.5 per cent to 2.25 million cars.

Last month’s decline of 44 per cent means some 203,370 fewer cars were registered than in March 2019.

The performance represented a steeper fall than during the 2009 financial crisis.

With lockdowns taking place in many European countries earlier than the UK, even more dramatic falls have been reported elsewhere.

For instance, Italy’s new car market shrank by 85 per cent in March, while registrations in France fell by 72 per cent and Spain down 69 per cent last month.

In Britain, demand from private buyers and larger fleets fell by 40 per cent and 47 per cent respectively. 

Meanwhile, the numbers of petrol cars joining the road was down by half, while diesel demand crashed 62 per cent.

Electric and hybrid cars fared much better.Registrations of battery electric vehicles (BEVs) rose almost three-fold in the month to 11,694 units, accounting for almost five 5 per cent of the market, while plug-in hybrids (PHEVs) grew 38 per cent. Uptake of hybrid electric vehicles (HEVs), however, fell by 7 per cent.

The SMMT said that while many car showrooms are likely to remain closed for the coming weeks, companies are ‘still working to ensure deliveries to critical workers’ and garages are also ‘striving to keep sufficient service and repair workshops open to maintain vehicles which are helping to deliver essential goods and services across the country’.  

Hawes said in a statement on Monday: ‘With the country locked down in crisis mode for a large part of March, this decline will come as no surprise. 

‘Despite this being the lowest March since we moved to the bi-annual plate change system, it could have been worse had the significant advanced orders placed for the new 20 plate not been delivered in the early part of the month. ‘

He added: ‘How long the market remains stalled is uncertain, but it will reopen and the products will be there. 

‘In the meantime, we will continue to work with government to do all we can to ensure the thousands of people employed in this sector are ready for work and Britain gets back on the move.’

While the industry remains handcuffed by the lockdown, car manufacturers and their retail networks are providing volunteers and diverting resources and funding to help the national effort during the pandemic. 

The SMMT says that hundreds of vehicles have been deployed in local communities across the UK, helping front-line workers and volunteers in the emergency services, welfare and charity sectors to look after society’s most vulnerable. 

Other supportive efforts include providing breakdown assistance for NHS workers, converting premises into storage and food bank facilities, supplying personal protective equipment such as safety goggles and face shields and working alongside other sectors to scale up ventilator production.

Commenting on the March registration figures, Michael Woodward, UK automotive lead at Deloitte, said: ‘The safety of workers, dealers and consumers remains paramount, and a return to ‘business as usual’ unclear. 

‘As a result, everyone from manufacturers to dealers will be asking themselves how they can respond to demand when we emerge from the current situation. 

‘A number of dealers have already moved their interactions online, and the ability to support this will become imperative in the longer term.

‘During this period of economic uncertainty, the industry is beginning to introduce flexible measures around payments to protect the interests of consumers. These include contract extensions, payment deferrals, interim loans and refinancing packages.’

If you have a vehicle on finance or lease and cannot afford your monthly payments due to a loss of pay during the coronavirus pandemic, you can read our guide on the steps you can take.