Local dealerships have seen new car sales accelerate in June to 3,278

That was almost 20 times the volume of cars sold in the previous two months!

Showrooms were shuttered with only minimal sales (such as deliveries) trickling through in April 24 (a record low) and May (144).

Despite the 2,176% month-on-month rise, new car sales were down 37% relative to the same month last year. It also marked the worst sales figures for the month of June since the SMMT records began. That represents the sixth consecutive month of ‘worst month of sales on record’.

Clearly with the showrooms only opening on June 8 there were five fewer trading days last month relative to June 2019. Adjusting for the number of trading days reduces the year-on-year decline from 37% to 21%.

Looking at the first six months of the year new car sales are down 51% (UK = -48.5%). That equates to 15,674 fewer car sales.

2020 looks set to be the sixth successive year of flat or falling new car sales with 2014 was the last time Northern Ireland dealers posted a meaningful increase in sales.

Richard Ramsey, Ulster Bank Chief Economist, Northern Ireland explained: “There is very little sign of pent-up demand for new cars. One factor that may be holding back some demand concerns expectations for a VAT cut or ‘cash for clunkers’ scheme. Both of these temporary measures were introduced following the last recession.

However, any measures on VAT are likely to be much more targeted than last time around. I don’t foresee a universal temporary VAT cut for all consumer spending as was the case over a decade ago. Instead any VAT rate cut is likely to be targeted on the hospitality and entertainment sectors. We may see a more targeted ‘cash for clunker’ scheme linked specifically to the purchase of electric vehicles and incentives targeted at more environmentally friendly vehicles.

“During the last recession, the car market saw financially constrained consumers shift towards smaller vehicles but maintained loyalty towards the more prestige brands in the market.

“It will be interesting to see how consumer behaviours will evolve post-lockdown. Already we have seen sales of bicycles surge and the acceleration of the working from home trend. Consumers’ transport needs and motoring requirements could well be very different to what they were a few months ago. And this is before the financial implications of the current recession are taken into account.”

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