UK car sales plunge to lowest since 1946

The UK car market ground to a halt in April, with new vehicle sales plunging by 97% to the lowest level since the end of the second world war because of the coronavirus lockdown.

Just 4,321 new cars were registered last month, after car showrooms were banned from staying open as part of attempts to limit the spread of Covid-19.

It compared with 161,064 sales in the same month last year, and was the weakest since 1946 when the UK was emerging from war and resources were still rationed, highlighting the historic extent to which pandemic restrictions have hit the economy.

The lockdown began on 23 March. Sales for that month fell by 44% compared with 2019, the biggest fall since the financial crisis, before the almost total freeze in April. The majority of the cars sold in April were to fleet buyers who already had them on order, according to the Society of Motor Manufacturers and Traders (SMMT) which produced the figures.

Electric car sales offered one small bright spot for the industry, with sales down by just 9.7%, meaning 32% of all sales were of battery electric cars with zero exhaust emissions of carbon dioxide – the highest share on record. Tesla, whose Model 3 was the bestselling car in April, is much less reliant on showroom sales. Jaguar Land Rovers Jaguar I-Pace, an electric SUV, was the second bestselling car.

The UK car market was already being squeezed before the pandemic, with confusion over fuel types following emissions-cheating scandals that prompted a consumer and political backlash against diesel cars. Brexit uncertainty also held sales back in recent months.

The government is considering how to ease the pandemic lockdown without allowing the disease to spread again, but there are concerns that even a gradual easing of restrictions will do little to spur car sales once more, amid surging unemployment. The SMMTs latest forecast for 2020 suggests there will be 1.68m new car registrations, the worst year for sales since 1992, when the population was smaller.

The industry lobby group said reigniting demand would be key to saving jobs in UK sales and manufacturing. Production plunged in March to its lowest level since 2009, and the SMMTs figures are expected to show a similar freeze in April. All large UK factories have also been closed during the lockdown, although some started to gradually reopen on Monday.

Mike Hawes, the SMMT chief executive, said, “With the UKs showrooms closed for the whole of April, the markets worst performance in living memory is hardly surprising. These figures, however, still make for exceptionally grim reading, not least for the hundreds of thousands of people whose livelihoods depend on the sector.

“A strong new car market supports a healthy economy and as Britain starts to plan for recovery, we need car retail to be in the vanguard. Safely restarting this most critical sector and revitalising what will, inevitably, be subdued demand will be key to unlocking manufacturing and accelerating the UKs economic regeneration.”

Volkswagens procurement boss said reduced volumes had made components more expensive, further adding to financial pressures for manufacturers which are running production lines at lower speeds to allow physical distancing by factory workers.

“If we continue to see lower volumes, parts will be more expensive,” Stefan Sommer told the Financial Times.