Used-car market continues to suffer

While Society of Motor Manufacturers and Traders (SMMT) figures showed that new car registrations rose by more than 11% in July, more recent statistics show that the UK’s used car market declined by almost half in the second quarter of the year, with only 1m units changing hands.

While the slowdown was sharpest in April, it remains to be seen how quickly this part of the market can recover, especially given the need for new-car demand, which is also low at present, to create fresh stock.

The UK’s new heavy goods vehicle (HGV) sector slumped even more sharply between April and June. It was down 73.4%, with just 4,151 new units registered. 

However, the fact that HGV sales were particularly strong in Q2 2019 following the introduction of smart tachographs should be taken into account.

New bus and coach registrations were down 77% in Q2 following the sharp decline in public road transport use during the lockdown period. It’s hoped that pent-up demand will drive increased sales across all these sectors during the rest of the year. For more information and general guidance, go to the SMMT’s Coronavirus Hub

On 5 August, Santander joined a Department for International Trade (DIT) Midlands event, which looked at the automotive supply chain in Mexico and specifically the Nuevo Leon automotive cluster, and the technology opportunities for UK businesses there. More information from the event can be found here.  

On 29 September, we’ll be running a webinar with the DIT, the SMMT and the Basque automotive organisation Acicae, looking at the excellent trading opportunities in Northern Spain. Details of this event are available here.  

Manufacturing sector news

Following the publication of UK GDP (gross domestic product) figures for the second quarter of 2020, which showed a contraction of more than 20%, MakeUK said ‘While industry is seeing some signs of a recovery in demand, with manufacturing production seeing its largest increase since records began in 1968, the sector has been through a profound shock and the impact of which will continue to be felt for some time to come, especially with major redundancies coming through the pipeline which are going to remove significant spending power from the economy.
‘Some sectors of the economy are facing accelerated restructuring because of the pandemic, others which are fundamentally sound, and which will be vital to our future growth in high-value and high-skill sectors, will continue to be disproportionately impacted.’

The organisation has called for the Government to be flexible in extending job support schemes, and to follow the lead of our European neighbours.

On 10 September, MakeUK published the 2020-21 Manufacturing Fact Card in conjunction with Santander. This will highlight the fact that the average salary across the sector’s 2.7m employees is £34,538, 13% higher than the national average.

MakeUK is also calling on ministers to make sure BTEC students receive their results as quickly as possible in order that they can access apprenticeship schemes and other manufacturing opportunities. The organisation has also created a guide for employers to help them manage workplace coronavirus outbreaks. It can be found here.  

To discuss how Santander can help your business please contact: ccbsectorinsights@santander.co.uk

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