With the full lockdown measures in place for the whole of April and May, the impact on the used car market, albeit devastating, is not surprising.
According to the latest figures recently released by the Society Of Motor Traders & Manufacturers (SMMT), the market for secondhand cars declined by almost half in the second quarter of the year, with just over one million units changing hands.
As the lockdown eases and private buyers and sellers get back on the move, we hope to see more activity returning in the coming months, particularly as many people see vehicles as a safer and more reliable way to travel during the pandemic.
More worrying, however, is the news last week that the UK economy suffered its biggest decline on record in quarter two.
Big ticket purchases such as cars inevitably take a disproportionately bigger knock in downturns so much will depend on how quickly the economy can recover.
We all hope for a V shape, but a U shape looks more likely, and, in particular, the effect on business and consumer confidence as the inevitable cross-economy job losses kick in as the Government furlough scheme tapers out.
For many reasons, the end of October could be a watershed.
For now, economic uncertainty reigns, exacerbated by the looming end to the Brexit transition period, now just a few months away.
Whilst we know we are leaving the single market and customs union, businesses still don’t know the terms of trading beyond the end of this year.
We continue to call for ambitious tariff-free FTA and one suspects this is increasingly coming down to political will, but we are also doing what we can to help.
Regular COVID-19 webinars are now being refocused on preparedness as the SMMT meet later this week with representatives from the Home Office who will discuss the government’s EU Settlement Scheme and what companies can do to support EU nationals in their workforce.
They will also provide insight into the UK’s new Points Based Immigration System, which comes into force on January 1, 2021.
Rodney Sadd
TU delegate
South Holland & The Deepings CLP
