New car sales
Sales down 34.9% in June as public “appetite for spending remains questionable”
Are they picking up or still faltering?
UK car sales fell 34.9% year on year in June – the first full month in which car retailers were open again post-lockdown – while dramatic changes in buying habits emerged.
Figures from the Society of Motor Manufacturers and Traders (SMMT) show a significant improvement over April and May (down 97% and 89% respectively) but still far from the comeback the industry had hoped for after being out of action for more than two months.
SMMT chief executive Mike Hawes described June’s sales as “not a recovery and barely a restart”, adding: “Many of June’s registrations could be attributed to customers finally being able to collect their prepandemic orders, and appetite for significant spending remains questionable.”
There were 145,377 cars sold last month, a decline of 78,044 over June 2019. Year to date, the market has shrunk by almost half (48.5%), with 653,502 new cars sold in the first six months, making it the leanest year since 1971.
However, while the decline reflects economic uncertainty, retailers aren’t yet fully up and running nationwide. Only those in England were open for the full month, with delayed reopenings in Scotland, Northern Ireland and Wales. In England, one in five retailers remains shut, and reports suggest upwards of 30% of sales staff remain on furlough.
The top 10 best-selling cars list, which had featured a host of unexpected entries over the past few months, had a more familiar look in June, with the Vauxhall Corsa and Ford Fiesta big hitters reclaiming the number one and two spots.
That was in stark contrast to April, when the Tesla Model 3 became the best-selling car, with 658 units sold. This was due to deliveries of a number of pre-ordered cars before the lockdown. Nevertheless, the electric saloon came ninth in June.
Tesla is one of just two brands that managed to grow its sales in the first six months of 2020. The other was MG, which has long been off the radar for most UK buyers. Thanks to the ZS EV, an electric crossover, it achieved its best June volume yet, with 2025 cars sold and a record monthly market share of 1.4%.
Year to date, the Chinese company’s sales are up by a quarter, moving it ahead of Dacia, Lexus and Mitsubishi and within reach of Fiat, Mazda
and Suzuki, which are all fewer than 1000 sales ahead.
The success of Tesla and MG reflects the growing demand for plug-in cars, which was already on the rise before the pandemic. Plug-in hybrids and electric cars held more market share than hybrids in June. Electric cars had a 6% share, with sales up by 262% – the equivalent of 8903 cars.
Despite this rise, the CEO of car retailer Marshall Motor Group, Daksh Gupta, doesn’t believe it’s related to the pandemic. He said: “We’re starting to see an increase in prominence of hybrid and EVS, but there’s a huge shortage in supply. There’s more appetite for environmentally friendly vehicles, but this was improving anyway, rather than as a result of lockdown.”
Diesel car sales, which have been decreasing steadily over the past few years partly as a backlash to the Volkswagen Dieselgate scandal, now account for less than a fifth of the market. Just 23,011 diesels were sold in June, compared with 87,896 petrols, the latter making up 60.5% of the overall market. As recently as 2016, diesel sales accounted for almost half of total volume.
Given the current economic uncertainty, it’s no surprise that fleet sales fell by a substantial 45.2% in June. The SMMT attributed this to “businesses pausing purchasing amid expenditure reviews”. Private demand was more resilient, falling 19.2% compared with June 2019 and accounting for more than half of the overall market.
Gupta identified two key groups helping private sales: people who would ordinarily use public transport and those described as ‘revenge buyers’. The latter are people who haven’t struggled financially during the lockdown now wanting to treat themselves post-lockdown with holidays no longer high on their agenda.
As a result, the proportion of buyers part-exchanging cars has fallen from 63% to 50%.
Nonetheless, retailers remain cautious about the year ahead. Jardine Motors Group CEO Neil Williamson described his company’s sales in June as “better than our worst-case scenario”, adding: “Let’s wait and see if it continues.”
Vertu Motors boss Robert Forrester said: “June saw robust sales in all areas of the business, reflecting pent-up demand, and this is expected to continue for some time. We should not declare victory too early, given the economic weakness likely to be created by the rise of redundancies across the UK and many sectors in major trouble. This may be only the end of the beginning.”