Promising signs of recovery as car sales rocket 11% in July

Promising signs of recovery as car sales rocket 11% in July

New car registrations have risen 11.3% in July compared with the same month in 2019, according to the latest figures from the Society of Motor Manufacturers and Traders. The widely publicised figures are being attributed to pent-up demand following months of closures due to the coronavirus pandemic.

Last month, we wrote about new car sales dropping 89% in May, but June showing promising signs as dealerships began to open back up for business. As highlighted in our previous blog, a survey from WhatCar? found that almost a fifth of car buyers were poised to make a purchase imminently. The sharp increase in new car registrations is certainly a promising sign for the remainder of the year, although “economic uncertainty could put the brakes on recovery”, the SMMT has stated.

July car registrations in detail

In total there were 174,887 cars registered in July – the first full month of trading since February. Petrol sales rose 0.3% on last year, to 101,392, whereas diesel sales continued to decline, showing almost a 26% fall, to 28,844.

New diesel car registrations only occupied a 0.3% larger market share than battery electric and hybrid vehicles. The new engine types made huge gains for the month, rising 137%, to 28,388 new registrations. Mild Hybrid Electric Vehicle (MHEV) registrations saw almost a 200% increase, rising to 16,263.

The increases can be mostly attributed to private sales, which jumped 20.4% in July, compared with a 5.2% rise in fleet registrations. Business registrations dropped 11.8% for the month, which is understandable considering many employers have felt the effects of the economic shutdown and a large portion of the workforce are continuing to work from home.

Outlook for the full year 2020

While July is showing positive signs of recovery, there is no getting away from the impact the pandemic has had on the entire economy. The automotive industry has, obviously, not escaped undamaged as there is currently a 41.9% decline in new car registrations for the year-to-date. The SMMT is expecting this to be down 30% by the end of 2020, totalling £20bn in lost sales.

Mike Hawes, SMMT Chief Executive, said: “July’s figures are positive, with a boost from demand pent up from earlier in the year and some attractive offers meaning there are some very good deals to be had. We must be cautious, however, as showrooms have only just fully reopened nationwide and there is still much uncertainty about the future.”

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