Car sales see worst start to the year since 1970 as lockdowns stall recovery

New car sales at the start of the year were the weakest since 1970 as the recovery the beleaguered industry had hoped for stalled, industry figures show.

a crowded parking lot with many cars driving on a busy street: Sales in January were down by 39.5% on a year ago

© Reuters
Sales in January were down by 39.5% on a year ago

Just 90,249 vehicles were registered last month, 39.5% down from a year ago and the lowest January figure for more than half a century, as lockdown measures took their toll.

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The slump would have been even worse if not for “click-and-collect” options put in place by dealerships adapting to life during the pandemic, said the Society of Motor Manufacturers and Traders (SMMT), which published the data.

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It called for showrooms to be reopened as soon as it is safe to do so.

The January data follows a “lost year” for the industry in 2020 when new car sales fell by 29% to 1.63 million, their lowest level since 1992.

The SMMT has scrapped a forecast that the number would recover back above 2 million this year, and it now expects that while there will still be an improvement on 2020, the number will be lower than 1.9 million.

With lockdowns in place until March, normally the biggest month for new car sales, the industry “will face a challenging year as showroom closures depress consumer demand, which has a knock-on effect on manufacturing output” the report said.

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Last month’s figures showed a 62% slump in demand for diesel and a 51% fall for petrol cars, though battery electric vehicles were up by 54% – taking their market share to just under 7%.

The industry faces a major challenge as the government plans to ban sales of new petrol and diesel vehicles from 2030 as part of plans to tackle climate change.

SMMT chief executive Mike Hawes said: “The auto industry faces a difficult start to 2021.

“The necessary lockdown will challenge society, the economy and our industry’s ability to move quickly towards our ambitious environmental goals.

“Lifting the shutters will secure jobs, stimulate the essential demand that supports our manufacturing, and will enable us to forge ahead on the Road to Zero.

“Every day that showrooms can safely open will matter, especially with the critical month of March looming.”