U.K. Car Sales Stumble in August Setback to Summer Recovery
September 13, 2020
(Bloomberg) — U.K. car sales declined in August, denting hopes of a recovery in the industry from a coronavirus-driven sales slump.
Vehicle registrations dropped 5.8% to 87,226 vehicles, according to the Society of Motor Manufacturers and Traders.
July brought the U.K.’s first monthly gain in car sales of 2020, providing some relief as the industry cuts jobs and capacity to weather the pandemic. Last month’s dip mirrors declines in Germany, France and Spain, though the longer-term trend remains unclear given August is typically one of the quietest for showrooms.
“The decline is disappointing, following some brief optimism in July,” said SMMT Chief Mike Hawes. “With the all-important plate change month just around the corner, September is likely to provide a better barometer.”
Registrations are down almost 40% in the first eight months of the year, the SMMT said.
July’s growth had been driven by pent-up demand as well as commuters looking for alternatives to public transport. There was some optimism that the bump would extend in August if school reopenings and freedom from months of lockdowns reinforced the trend.
More: French, Spanish Car Sales Drop in Blow to Virus Recovery Hope
“What seems far more significant is the outlook for September and beyond, which remains positive as the industry continues its recovery from lockdown,” Ian Plummer, director at sales site Auto Trader, said in a separate statement. He said consumer visits had increased more than 30% in August from a year earlier, and order books at dealers signal “a promising September.”
The SMMT has previously warned that uncertainty about the economy and the U.K.’s exit from the European Union would continue to weigh on carmakers. Last month, Jaguar Land Rover, the U.K.’s largest carmaker, said it would slash costs by 2.5 billion pounds ($3.3 billion).
One bright spot for the industry has been electric vehicles, with demand more than doubling over the past year. In August, registrations of plug-in hybrids more than tripled while all-electric cars gained 78%. Carmakers now have 83 plug-in hybrid and full electric models on sale in the country, the SMMT said.
The SMMT is seeking government incentives to be reintroduced on plug-in hybrids to attract more buyers, as well as binding targets on charging infrastructure. The U.K. needs 1.7 million on-street charging points to be built by 2030 to keep pace with consumer demand, SMMT said.
“If the U.K. is to become a global leader in the drive to net zero, we need industrial as well as market transformation,” Hawes said. “This will require a bold strategy to retain and grow our automotive manufacturing base, and attract new investment.”
(Updates with final August data from first paragraph.)
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