Fleet sales fell -45.2% in June as businesses paused purchasing

SMMT figures show that fleet sales fell by a very substantial -45.2% to 69,498 units in June 2020, as businesses paused purchasing amid expenditure reviews as the lockdown began to ease.

Overall, UK new car registrations fell -34.9% in June compared to the same month last year, but was an improvement on May's -89.0% decline.

As the market began a tentative restart after more than two months of lockdown, with 145,377 new cars registrations in June, this still represented a significant decline of 78,044 compared with June 2019, as dealerships in Wales and Scotland remained closed for much of the month.

This means that the market is almost 616,000 units, or -48.5%, behind the same period last year, with some 240,000 private sales lost since consumers the lockdown, resulting in an estimated £1.1 billion loss to the Treasury in VAT receipts alone.

Private demand proved more resilient than business, down -19.2% in June with orders made pre-lockdown resulting in 72,827 registrations and accounting for more than half of the market.

With one in five showrooms in England remaining shut throughout June, and those in Wales and Scotland unable to open until the end of the month, there remains some uncertainty regarding the true level of demand. The hoped for release of pent-up sales has not yet occurred, with consumer confidence for big ticket purchases looking weak meaning that automotive is likely to lag behind other retail sectors.

As the wider retail and hospitality sectors re-open and society and the economy begin a gradual return to normality, the true picture of consumer confidence is likely to emerge. However, concerns remain with the government’s Coronavirus Jobs Retention Scheme winding down and major employers across all sectors announcing significant job losses. The subsequent effect on livelihoods as well as on business and consumer confidence will not help a depressed market.

Mike Hawes, SMMT Chief Executive, said: "While it’s welcome to see demand rise above the rock-bottom levels we saw during lockdown, this is not a recovery and barely a restart. Many of June’s registrations could be attributed to customers finally being able to collect their pre-pandemic orders, and appetite for significant spending remains questionable.

"The government must boost the economy, help customers feel safer in their jobs and in their spending and give businesses the confidence to invest in their fleets. Otherwise it runs the risk of losing billions more in revenue from this critical sector at a time when the public purse needs it more than ever."