Press release

4 Jun 2021 London, GB

UK new car sales up 674.1% year-on-year in May as showrooms fully open – EY ITEM Club comments

New car sales saw a huge year-on-year rise of 674.1% in May, boosted by showrooms being fully opened during the month – they had been closed throughout May 2020. New car sales had risen 3,176.6% year-on-year in April after showrooms re-opened on the 12th of the month.

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Related topics Growth COVID-19
  • New car sales saw a huge year-on-year rise of 674.1% in May, boosted by showrooms being fully opened during the month – they had been closed throughout May 2020. New car sales had risen 3,176.6% year-on-year in April after showrooms re-opened on the 12th of the month
  • May's increase in new car sales benefited from comparison with the extreme weakness of sales in May 2020 when only 20,247 vehicles were sold
  • May 2021 car sales were still 14.7% down on pre-pandemic sales in May 2019 and 13.2% down on the average sales for the month over 2010-19
  • May’s rise in car sales saw private sales rising 472.6% year-on-year, adding to evidence that more confident consumers are stepping up their spending. Additionally, fleet sales rose 1.094.9% year-on-year
  • The car sector will undoubtedly be hoping that increasingly confident consumers and businesses become more prepared to buy new cars as the economy sees robust recovery from the second quarter onwards, supported by the easing of restrictions
  • Many consumers look to be relatively well-placed to buy a car given the very high household savings ratio. Further welcome news for the car sector is the current resilience of the labour market and the likelihood that unemployment will peak at a much lower level than had been initially expected
  • Meanwhile, many businesses have likely delayed replacing their fleets due to uncertain circumstances since early-2020. The car industry will therefore be hoping businesses become increasingly willing to replace them as the economic recovery develops.

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

“The SMMT reported that new car sales saw a strong increase of 674.1% year-on-year in May, at 156,737 vehicles. This was lifted by car showrooms being fully open throughout May after their re-opening on 12 April. In contrast, car showrooms were closed during May 2020 due to the first lockdown in the UK, and new car sales had amounted to just 20,247 vehicles.

“May 2021’s new car sales were still 14.7% down on pre-pandemic sales in May 2019 and 13.2% down on the average sales for the month over 2010-19.

“May’s gain marked a third successive year-on-year rise in new car sales including an increase of 3,176.6% to 141,583 vehicles in April. However, this was from a base of just 4,321 sales in April 2020. This followed a gain of 11.5% year-on-year in March, which had been the first increase since last August.

“Consequently, new car sales were up 42.5% year-on-year over the first five months of 2021 at 723,845 vehicles. However, the SMMT pointed out that this was 296,448 fewer units, or -29.1% less, than the average recorded across January to May during the last decade. 

“While COVID-19 restrictions have had an impact on new car sales since early-2020, a number of other factors appear to have weighed on new car sales recently: 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.

“Indeed, new car sales only achieved one monthly year-on-year gain in 2020. As a result, new car sales fell 29.4% over 2020 with the total 1,631,064 vehicles being the lowest since 1992. Furthermore, the sales fall of 29.4% was the largest since 1943."