New car registrations see first rise this year

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New UK car registrations went up in July for the first time this year, according to the motor industry.

Some 174,887 cars were registered in July, an 11.3{d758473eadf0b692d331aa823300cffd0ef21fd1fd535177f3429dd328b70b5d} rise on the same month in 2019, figures from the Society for Motor Manufacturers and Traders showed.

The last time there was an increase was in December last year.

It follows months of dramatic declines due to the effects of the coronavirus pandemic, which closed car factories and showrooms.

But although new registrations have risen sharply, concerns remain about the true health of the sector.

People within the industry believe that the increase simply reflects pent-up demand from consumers who had been planning to buy new vehicles earlier in the year, but were unable to do so.

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July was the first time dealerships across the UK were open for a full month since February.

With the government’s job retention scheme coming to a close in October, and many companies now laying off staff, there are concerns that a fall in consumer confidence could hurt future sales.

Mike Hawes, SMMT chief executive, said the sales rise was “a reprieve for the sector”, but the market remained fragile and could suffer from any future coronavirus lockdowns.

“We must be cautious… there is still much uncertainty about the future,” he said. “The next few weeks will be crucial in showing whether or not we are on the road to recovery.”

Government help

Meanwhile, registrations for the year as a whole are expected to be 30{d758473eadf0b692d331aa823300cffd0ef21fd1fd535177f3429dd328b70b5d} lower than they were in 2019.

Andy Barratt, managing director of Ford of Britain, which employs about 9,000 people in the UK, said he was “pleased to see any rise in consumer demand, but I don’t think this is a long term indication of a V-shaped recovery”.

He told the BBC’s Today’s programme: “I think that there will be reasonable demand through September, when the registration plate changes, but without government intervention this sector won’t recover until at least the middle of next year.”

He said a key consumer stimulus would be incentives to change older vehicles for new ones, especially help towards changing more polluting cars for cleaner ones.

Hard work ahead

Rachael Prasher, managing director of What Car?, said the latest SMMT figures were good news, but she also warned against reading too much into the figures.

“This is very welcome news to the UK’s automotive sector and a testament to all the hard work put in to kickstart the industry by dealers and manufacturers as lockdown eased.

“After nearly three months of closed doors, it is great that the industry has demonstrated its remains so robust.

“However, with this month’s success driven largely as a result of pent-up demand and lease cycles there is still much hard work to do ahead.”

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