Alison Ashley, partner at RSM, comments: ‘The all-important barometer of the September plate change month has dampened the short-lived optimism from buoyed demand since dealerships reopened. New car registrations fell by 4.4 per cent which sets a new record low for September year on year.
‘Demand and profitability through the summer months has exceeded expectations and coupled with the likes of furlough and rates discounts, has rebalanced the books for many. September was a pivotal month and dealers will now look to batten down the hatches and hang on to those reserves through the winter months.
‘We expect to see the continued and seasonal decline in new vehicle registrations from October onwards, and the trajectory will likely be further fuelled by inevitable increase in redundancies following the end of government support schemes. Whilst government measures have helped to preserve cashflow to date, dealers will need to be prepared to be quick in decision making and adapting.
‘There is clearly a great deal of uncertainty for the future and we should be concerned. Ongoing measures including the Job Support Scheme and extension of government loans will help but there are other hurdles in the way of economic recovery and longer term consumer spend.
‘The impact of local lockdowns is already affecting footfall in the dealerships. Production line disruption, network reshaping and the impending Brexit deadline mean that the headwinds are as strong as ever. Dealers have already shown incredible resilience and resourcefulness and this will be even more important as cashflow tightens heading into the New Year.’