Car registrations tumble as Covid-19 shuts showrooms

New car registrations fell more than 40% in March as the Covid-19 crisis shut showrooms, industry figures showed.

Total registrations fell to 254,684 from 458,054 a year earlier – a decline of 44.4%, the Society of Motor Manufacturers and Traders reported.

SMMT reduced its market outlook for the year by 23% to 1.73m registrations from an earlier estimate in January. The number of registrations in all of 2019 was 2.51m units.

Mike Hawes, SMMT's chief executive, said: "With the country locked down in crisis mode for a large part of March, this decline will come as no surprise … We should not, however, draw long term conclusions from these figures other than this being a stark realisation of what happens when economies grind to a halt."

Hawes said the results would have been worse if large advance orders for the new 20 plate had not been delivered early in March. SMMT said earlier lockdowns in other European countries caused even steeper declines with Italy down 85% and a reduction of 72% in France.

Samuel Tombs, chief UK economist at Pantheon Macroeconomics said the industry should be braced for a year-long slump in sales as the Covid-19 crisis wields further damage to the industry's fortunes.

Tombs said: "The hit to registrations from car plant shutdowns in the UK and the rest of Europe, as well as the recent decline in consumers’ confidence, still lies ahead. Car sales likely will lag any recovery in the wider economy in the second half of this year, given that buyers can easily defer purchases and must be confident in their financial outlook before committing to such a large purchase."