It has been a month of halves with two weeks of unexpected silence in the showrooms resulting in many staff being furloughed in the absence of customers.
Service departments and smaller garages are working to keep key workers mobile and safe with their transportation needs and the insurance industry is still largely active. Dealers still have a shop window and many eyes browsing vehicles on sale. However, there is a low volume of online sales taking place although delivery in the most part is not possible until the lockdown is lifted.
The headline new car market statistics show that registrations for the month dropped by 44.4% in comparison to the same period last year. Given that this effectively means the remainder of the figures represent just two weeks of activity it is still relevant to note that the market share statistics are a reasonable indicator of the type of activity that took place.
Private registration market share was up 3.4 percentage points for the month in comparison with March 2019 at the expense of the Fleet sector which suffered a 2.6 percentage point drop, although market share for the year to date for both sectors is almost exactly the same at 47.2% and 50.9%.
From a fuel type perspective, diesel registrations are now just 17.6% of the March market down 8.1 percentage points in March 2019 with the year to date figure at 18.9%. Petrol sat at 60.1% for the month and 60.9% for the year to date.
The most important other increase is for BEVs which are up from 0.9% last year to 4.6% for March 2020 taking the year to date figure to 3.8% market share.
Consumer confidence only dipped mildly during March which is surprising and can only reflect the early weeks where despite the spread of the virus the public was still allowed to shop and move in society unhindered.
But the forecast is clear with a significant dip expected through until July when many experts believe the lockdown will be rescinded.
Prices have shown a very slight rise over the months, however, but not as much as 12 months ago.
The last month has been complicated for both the new and used car markets. It is vital to remember that even though the wholesale and auction market is silent the retail market is still open.
Dealers are still taking deposits and most certainly changing pricing as they jockey for position in the virtual shop window. During this period whilst many people have been furloughed the senior management and pricing teams are still very much on duty and in many cases seeking to improve online presence and develop more robust remote operational and sales processes in readiness for the end of lockdown.
There is no need for pricing reductions right now so the industry must be careful not to be lured into a race to the bottom and using real-time insight from Cazana will ensure the business can accelerate profitability as soon as normal trading resumes.
© Cazana
