Car dealers are optimistic about the future of the motor retail sector, with 71% of dealers feel confident in the longer-term recovery.
According to research from the Britain Under the Bonnet report, from Close Brothers Motor Finance, at the beginning of 2020, 98% of car dealers were confident about business prospects for the year ahead, with almost two thirds (63%) feeling ‘very confident’.
But with COVID-19 resulting in a 97% fall in new car sales in April, more than two in five (43%) dealers admitted in the same month to feeling worried about their business prospects in the next six months.
Just one in ten (10%) said they were confident.
However, looking at the medium and long term, dealers are more positive. Dealers are expecting the UK to mirror the V-shaped recovery seen in China and Germany.
When asked about the business outlook for their own firm over the next 7 to 18 months, 43% are confident and just 20% apprehensive.
Looking further ahead past 18 months, well over half (57%) are confident and only one in ten (10%) remain concerned.
Seán Kemple, director of sales at Close Brothers Motor Finance said: “The motor industry has not had an easy few years, with external forces like Brexit and economic uncertainty warring with sector-specific challenges around fuel-type and regulation.
“Dealers were extremely optimistic for 2020 as a year of recovery, so COVID-19 has hit extraordinarily hard. Government support around business rates, the furlough scheme, and frozen fuel duties have been invaluable, but manufacturers, dealers, and finance providers will have to work hard to return to some semblance of normality.
“But as we move towards recovery, the sector has an opportunity to ‘Build Back Better’. We’ve already seen demand begin to bounce back for new cars, and consumers are crying out for advice and guidance.
“Trends like the shift to alternative fuel vehicles are likely to accelerate, and a reticence to use public transport could boost both the used and new markets. Dealers need to have their fingers on the pulse and be equipped to guide customers through big decisions over the next couple of years. In the shorter term, Government support will be vital to get the sector back on its feet.”