The auto industry is hoping that a rebound in sales thanks to pent-up demand will help it recoup some of the losses suffered during lockdowns, when showrooms were forced to close. Showrooms in England were allowed to reopen on June 1, but it wasn’t until June 29 that all dealers in the UK were able to let customers in.
Vertu and Lookers said there was pent-up demand from customers unable to buy during lockdowns, offering welcome relief for an industry that was already under pressure to switch to online sales before the pandemic.
Some 95% of UK car dealers are confident their businesses will survive the impact of the pandemic, with growth in sales of generally cheaper used cars being seen as the biggest opportunity, according to a Close Brothers Motor Finance survey.
However, the industry looks nervously around September, the crucial month for new sales when license plates change. The Society of Motor Manufacturers and Traders, the British lobby group, has warned that further job losses could occur if sales through September disappoint.
Lookers has already laid off 1,400 workers, although 100 fewer than initially announced in June.
Mark Raban, CEO of Lookers, is cautious about the outlook for the industry.
“It has been a very difficult time for Lookers, but it is encouraging to see that we are starting to see healthy signs of a recovery in vehicle sales since the lockdowns were eased,” he said.
The company also announced that it has extended the scope of its 2019 audit, forcing it to delay its 2019 earnings report after an investigation uncovered potentially fraudulent transactions. In June, the group set aside £ 19million to close the gap.
In a statement to the stock market, Lookers said: “The broad scope of the audit identified additional work on the group’s corporate leasing division and vehicle finance agreements and 2018 and prior balance sheets to ensure a correct identification and allocation of adjustments. Additional work is underway to finalize the 2019 accounts. ”