UK car sales rocket as showrooms reopen

New car registrations motored ahead in April, industry data showed on Wednesday, as showrooms reopened and customers returned.
According to the Society of Motor Manufacturers and Traders, there were 141,583 new cars registered last month. That compares to just 4,321 registrations in April 2020, when the first national lockdown was in full effect.

April 2021’s figure remains 12.9% below the 10-year average, while overall registrations for 2021 now stand at 567,108 units, down 32.5% on the same basis.

However, the SMMT said the full impact of showrooms reopening had yet to be fully realised, given that there is normally a few weeks’ delay between a customer’s first visit to a dealership and them taking delivery of their new vehicle.

Mike Hawes, SMMT chief executive, added: “After one of the darkest years in automotive history, there is light at the end of the tunnel. A full recovery for the sector is still some way off, but with showrooms open and consumers able to [take] test drives, the industry can begin to rebuild.

“Market confidence is improving, and we now expect to finish the year in a slightly better position than anticipated in February, largest thanks to the more upbeat business and consumer confidence created by the successful vaccine rollout.”

SMMT is now predicting 1.86m new cars will be registered in 2021, compared to its earlier forecast for 1.83m. That would be a 13.9% increase on 2020 but a 20.2% decline on the average 2.33m registrations recorded annually between 2010 and 2019.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “Underlying demand remains week [and] a big improvement does not look imminent.

“Google Trends data show that the number of people searching online for one of the top five bestselling cars in the four weeks to 25 April was 15% below its average level in the same weeks 2016 to 2019.

“Households might be waiting for new electric models to be launched by the big car brands later this year. The government’s decision to reduce the Plug-in Grant also might be temporarily depressing demand. Nonetheless, with consumer confidence still a bit below its long-run average and real incomes unlikely to rise much this year as inflation recovers, car sales likely will continue to fall short of the levels seen in the 2010s.”

Plug-in vehicles accounted for just over one in eight vehicles sold in April. Plug-in hybrids were more popular, at 6.8% of the market, than battery electric vehicles, at 6.5%, which the SMMT attributed to cuts to the Plug-in Car Grant.

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