Most dealerships are only expecting to see a mild increase in sales since their doors reopened on 12th April.
Most dealerships are only expecting to see a mild increase in sales since their doors reopened on 12th April.
We all know that the last year has been somewhat bleak for the car industry, both from a manufacturing and sales perspective as all the numbers are down. This is due to the pandemic that we have seen and the various lockdowns and restrictions that have been put in place, which have generated a level of uncertainty for both consumers and businesses. So it goes without saying that the reopening of businesses is something that dealerships will have been waiting for.
It’s not hard to find an answer to just how bad the last year has been for car dealerships, with The Society of Motor Manufacturers and Traders estimating that the industry has suffered losses in the realms of £23 billion in the last year, beginning with the announcement by prime minister Boris Johnson that there would be a national lockdown from the end of March 2020. Looking at car registrations we can also easily see that these are down, as there were only 1.6 million new cars registered, which represents a drop of nearly 30% on the figure from 2019.
Although it is worth noting that these overall figures are heavily skewed by the first lockdown in the early days of the pandemic, with manufacturers and retailers effectively shutting up shop during this time. Since then they have continued to trade both face to face and more recently digitally.
As time has gone by there have been a number of changes to the restrictions in place, as well as valuable lessons being learnt, both of which have allowed businesses to start fighting back and building again.
“We have been operating throughout,” said Eurig Druce, managing director of Citroën UK. “While showrooms have been closed, customers have been able to buy online if that suits their needs, so we don’t see the market having the huge bounce back seen last July. There are also many people that are uncertain about how the pandemic will affect their jobs in the long term. Therefore, we are anticipating a slight increase this year in new car sales of approximately 12% from 2020.”
This idea of there not being a huge wave of customers coming through dealership doors to buy a new car was also backed by the CEO of the Vertu Motors Group, Robert Forrecter. “We’re already operating at between 70% and 90% of normal sales volume, even before the doors are reopened,” he said in a recent interview. “There is still some pent-up demand from buyers who will want to get into the showroom on 12 April, but nothing like the same uplift as we experienced after the first lockdown.”
Thanks to online technologies and the necessity to quickly adopt them, the industry has been able to reclaim a portion of the ground that was lost at the beginning of the pandemic. In addition to this the use of click and collect, home delivery and money-back guarantees are also in use across the industry, coupled with video calling with a personalised guided tour of cars being offered by the majority of dealerships and manufacturers.
Having said that it would seem that all of these new features and technologies being used are merely enhancing the traditional sales model instead of actually replacing it.
“We’ll never go back to where we were,” said Forrester. “Technology has moved on and the customer has moved on, but that’s not to say everyone is now buying purely online. That’s still a very small market.”
It would seem that despite all of these steps forward in the sale of cars it is unlikely that there will be a huge boost in sales as restrictions are lifted. This is in part due to the fact that they have allowed for consumers to continue to purchase cars amidst the pandemic, but the impact and uncertainty experienced by the majority of consumers will likely cause a slow growth of sales back to where they have been in the past.