Press release

5 May 2021 London, GB

UK new car sales improved in April as showrooms re-opened – EY ITEM Club comments

UK new car sales improved in April as showrooms re-opened – EY ITEM Club comments

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Annabel Banks

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Related topics Growth COVID-19
  • New car sales saw an extraordinary-looking year-on-year (y/y) rise of 3,176.6% in April, helped by the re-opening of showrooms on the 12th
  • However, it should be noted that April's lift in new car sales benefited from comparison with the extremely low sales at the same time last year when only 4,321 vehicles were sold
  • April 2021 car sales were still 12.9% down on the average sales for the month over the previous decade
  • April’s rise in car sales was led by private sales rising 7,010.8% y/y adding to evidence that more confident consumers are stepping up their spending. Fleet sales rose 2,398.8% year-on-year
  • The car sector will be hoping that April’s improved performance is an indication of consumers and businesses being more prepared to buy new cars as the economy sees a decent recovery, supported by the easing of restrictions
  • Many consumers look to be relatively well-placed to buy a car given the high household savings ratio seen over 2020. Further welcome news for the car sector is the resilience of the labour market and the likelihood that unemployment will peak at a much lower level than had been expected.   

Howard Archer, chief economic advisor to the EY ITEM Club, comments: 

“The SMMT reported that new car sales saw their second successive year-on-year rise in April as they grew 3,176.6% to 141,583 vehicles. This April, there was clearly a substantial boost to new car sales from showrooms re-opening on 12th. April’s figures followed a gain of 11.5% year-on-year in March, which had been the first increase since last August.

“While extraordinary looking, April’s year-on-year gains came against a significantly weak base: a record low of just 4,321 vehicles were sold in April 2020 when showrooms were shut throughout the month as part of the first lockdown. Indeed, this April’s new car sales were still 12.9% down on the average April level over the previous decade.

“The SMMT had earlier reported that some support for new car sales this March came from ‘Click and collect’, which has been made possible by manufacturers and their networks successfully investing in digital channels. New car sales had earlier declined 35.5% year-on-year to 51,312 vehicles in February, and 39.5% year-on-year to 90,249 vehicles in January, which had both been long-term lows for the respective months. 

“Consequently, new car sales were up 16.2% year-on-year over the first four months of 2021 at 567,108 vehicles. 

“While COVID-19 restrictions have affected new car sales since early-2020, a number of other factors appear to have weighed on sales too: consumer and business caution over making major purchases, reduced demand for diesel cars amid environmental concerns and uncertainties over policy, and stricter emission regulations affecting supply at times.

“New car sales only achieved one monthly year-on-year gain in 2020. Consequently, new car sales fell 29.4% over 2020 with the total 1,631,064 vehicles sold being the lowest since 1992. Furthermore, the sales decline of 29.4% was the largest since 1943.”