The Motor Ombudsman reports optimism among retail sellers of new and used cars

• Non-essential businesses, including car showrooms, will be welcoming customers back to their premises during April, as Covid-19 restrictions continue to be eased
• The Motor Ombudsman-accredited car retailers surveyed in the snap poll are expecting new and used car sales in the second quarter of 2021 to be higher than the same pre-Covid period in 2019
• The recent cut in the government’s plug-in car grant, social distancing and limited consumer budgets are forecast to be amongst the main challenges set to face dealerships during the coming weeks

With car showrooms allowed to welcome customers back to their premises during the month of April, as lockdown restrictions for non-essential businesses are eased, The Motor Ombudsman has conducted a snap poll of car retailers accredited to its Vehicle Sales Code to gauge their views on new and used car demand during the second quarter of 2021 versus the same three months in 2019 prior to the arrival of the Coronavirus pandemic.

From the franchise dealerships and independent car retailers surveyed, the study revealed that just over half (53%) are forecasting new car sales to be higher for the April to June period compared to the same quarter two years ago (i.e. pre-Covid), after total UK new car registrations also rose by 11.5% in March 2021 versus March 2020*. Just under a third (29%) of survey participants thought that new car demand would be comparatively lower in the second quarter of 2021 versus that seen a couple of years ago, whilst the remainder (18%) are predicting it to be the same as the April to June period in 2019.

When asked about used car purchases, 70% are estimating this to be higher in the second quarter of 2021 compared to the transactions in the equivalent months of 2019. A fifth (20%) of car retailers think that used car sales will be the same as the April to June period a couple of years ago, with only 10% of businesses predicting lower demand.

As more showrooms reopen their doors across the country on 12th of April, potential challenges that retailers said they could face in securing sales were namely, motorists displaying less interest in greener models due to the government’s plug-in car grant recently being reduced during lockdown (32% of poll participants), and the requirement for social distancing, making it more difficult to host customer events (36%), and to develop a relationship with consumers during the sales process (29%). In addition, around half (53%) of those surveyed stated that limited affordability may have the potential to affect footfall, as some motorists remain on furlough or have an element of uncertainty in their current job.

Bill Fennell, Chief Ombudsman and Managing Director of The Motor Ombudsman, said: “It has been valuable gaining a first-hand view of what car retailers within our accredited business network are expecting during the coming weeks when it comes to sales performance, and the main hurdles that they are likely to face as showroom doors reopen. Although challenges clearly remain with the much- anticipated return to face-to-face sales, the results of our snap poll nevertheless paint an encouraging outlook. This bodes well for businesses up and down the country after they have been waiting patiently to greet customers once again, and to get back to being able to interact with them on the forecourt.”