U.K. Car Sales Drop 89% in May After Lockdown Shuts Dealers

(Bloomberg) -- Automakers in the U.K. sold about 89% fewer cars in May than a year earlier with dealerships shuttered for a second month to help contain the coronavirus.

New-car registrations plunged to 20,247, according to data from the Society of Motor Manufacturers and Traders. That was the lowest sales figure for May since 1952, the SMMT said. Electric vehicles were the only segment to see growth, rising 21.5% compared with the previous year.

Britain's car industry is sputtering back to life from a virtual standstill caused by a national lockdown to contain the Covid-19 outbreak. Dealerships closed since mid-March have started to reopen as of June 1, while factories owned by the likes of Jaguar Land Rover, Nissan Motor Co. and Honda Motor Co. are resuming production with social-distancing measures in place to stunt the spread of the virus.

“There are encouraging signs for the industry that latent demand has been building during the lockdown period and boosted by people who usually commute by public transport, now considering the purchase of a car,” James Fairclough, head of AA Cars, said in emailed comments.

May deliveries were an improvement from April when automakers sold just 4,321 cars, the lowest since just after the end of the second world war. Elsewhere in Europe, the car industry showed tentative signs of a recovery last month with sales in France and Germany falling 50%, an improvement over April plunges, while Spain also showed a slight recovery.

May Car Sales Provide Glimmer of Hope for Europe's Auto Industry

“After a second month of shutdown and the inevitable yet devastating impact on the market, this week's re-opening of dealerships is a pivotal moment for the entire industry and the thousands of people whose jobs depend on it,” said Mike Hawes, the chief executive officer of the SMMT. “Restarting this market is a crucial first step in driving the recovery of Britain's critical car manufacturers and supply chain, and to supporting the wider economy.”

The SMMT has estimated that dealership closures cost the U.K. Treasury 61 million pounds ($77 million) a day in lost taxes and state-wage support, while the lost output is expected to cost the sector as much as 12.5 billion pounds.