There has been a great deal of uncertainty over what the impact will be on a number of industries following the lockdown, but one industry which seems to be bouncing back quickly is the automotive industry. Dealerships were one of the first things that were allowed to open and it seems people wasted no time at all in buying cars.
Rise in Demand
You did not have to be an expert to know that the automotive industry was in free-fall prior to the pandemic with new car sales plummeting in recent years for a number of reasons. Following the easing of lockdown, it seems that there has been a sharp rise in demand and it is likely that the continued threat of the virus is the main cause for this. People are reluctant to use public transport and automobiles provide a much safer and more convenient form of travel for people so it is easy to see many are now buying cars.
It was reported in mid-June that used car demand hit record levels with demand increasing by 37% week-on-week in England and used vehicle sales growing by 17% in the first two weeks of June compared to the same period last year. As you might expect, this has also seen a rise in the prices for second-hand cars with the average value of used vehicles sold increasing from £18,779 to £19,398. Those shopping in the used car market are also likely to require GAP insurance for financial protection too.
New Cars Also Rising
It is not just used cars that UK motorists are buying either as there has also been a rise in the demand for new cars since the easing of lockdown. Despite this, it is still a long day to recovery for the industry with new car registrations declining by 97% year-on-year in April, 89% in May and 35% in June. While there are some positives, it seems that there is still uncertainty amongst the UK public particularly when it comes to employment and spending and this is just one of many industries that is feeling the strain and in need of support.
It is certainly positive to see demand on the rise for both used and new cars following the easing of the lockdown restrictions and it is likely due to the safety that cars can provide which is the reason for this, but there are still difficult days ahead for the automotive industry. Car sales will need to continue to rise in the coming months, but this will depend on many different factors.