New car orders struggle ahead of March plate change

a car parked in a parking lot: Empty new car showroom

Retailers are reporting new car orders for the new March 21-series registration plate are down by as much as half as a 39.5 percent sales decline in January 2021 looks set to continue.

There are early signs of a similar decline in February 2021.

Automotive service company Cox Automotive surveyed car retailers and 3 in 4 reported a downturn in forward orders for March 2021 of between 10 percent and 50 percent, compared to 2020.

“Q1 is a critical period” said Cox Automotive strategy director Philip Nothard, “and it’s vital that showrooms are able to re-open as soon as possible.”

However, lockdown isn’t the only challenge faced by car dealers – and may actually be masking some of the other issues.

There are issues with new car supply related to the Brexit deal, said Mr Nothard, “with border frictions continuing and many industry leaders indicating there is no easy fix.

“This has been compounded by a global microchip shortage which continues to hamper and increasing number of manufacturer production lines.

“The disruption will soon impact new vehicle supply in the global market.”

Used car resilience

Used cars are, however, proving to be reliant, in contrast to the new car market.

Despite a 14.9 percent fall in sales last year, the sector “outperformed expectations,” said Mr Nothard, and actually partly recovered towards the end of the year.

“Changing consumer habits saw an increased demand for used cars that continues into this year.

“With the market already undergoing a shift towards digital retail prior to the pandemic, retailers were able to swing their focus to e-commerce remarkably quickly and capitalise on this demand.

“It’s encouraging to see many retailers have quickly adapted to the current conditions and perform well against the odds.”

Motoring Research has carried out in-depth research into both car manufacturers’ online sales platforms and the new wave of online car-buying services such as Cazoo and Cinch.

Many are now continually improving and expanding the services they offer to car buyers.

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