New car sales rise in UK after coronavirus lockdown decline

UK car sales rebounded in July as dealerships reopened after the lockdown, benefiting from pent-up demand after months of dramatic falls.

British new car registrations rose by roughly 11% year on year in July, according to preliminary data released by the Society of Motor Manufacturers and Traders (SMMT), the industry lobby group.

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The figures represent the first monthly increase since December 2019, before the coronavirus outbreak spread across the world, but sales are still down by about 40% over the first seven months of 2020 compared with 2019.

The car industry was hit particularly hard by the lockdown, with dealership closures cutting off a large proportion of revenues, while every major car factory across Europe was forced to close temporarily because of supply chain problems and concerns for workers’ safety.

July was the first full month of trading nationwide after dealerships were allowed to reopen their doors to customers on 1 June in England, 8 June in Northern Ireland, 22 June in Wales and 29 June in Scotland. It followed extensive lobbying from the industry, which feared many thousands of jobs could be lost.

Most UK factories, with the exceptions of Vauxhall’s Ellesmere Port plant and Aston Martin’s main Gaydon facility, have restarted production but the prospects for the industry are bleak as an unemployment crisis looms.

UK production in the first half of the year was the lowest since 1954, the year second world war rationing ended, with only 381,357 cars rolling off lines.

The automotive retail industry was already under particular pressure from structural changes such as the growing – albeit belated – popularity of online car sales, with the lockdown denting profitability further.

Car dealership groups have already been forced to cut thousands of jobs, with Lookers making 1,500 redundancies in June, Pendragon cutting 1,800 and Jardine Motors cutting 500. Another dealer, Inchcape, has said it will cut head office roles, although it has not yet provided numbers.

More gloom is expected in factories and dealerships as the economic crisis unfolds. The SMMT’s count suggested that more than 13,000 job losses had been publicly announced so far in 2020 across the sector.

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