More Optimism: SMMT, NFDA and FLA Looking Ahead

Mike Hawes SMMT CEO

As you’ll have gathered, there are lots of reports coming out at the moment looking back at the motor retail sector’s 2020 performance and looking ahead to 2021 and beyond.  As we say elsewhere, there are gloomsters and there are optimists. But both the NFDA and the FLA are, cautiously, predicting better times ahead., though the SMMT has revised its latest forecast down.

The boss of the National Franchised Dealers Association (NFDA), Sue Robinson, says that while new car sales fell nearly 40% due to the January lockdown, their members are optimistic about 2021.

“Retailers are optimistic about the year ahead, provided that dealerships will be allowed to reopen as soon as it is safe to do so”, said Sue Robinson.

“There is a proportion of consumers waiting for dealerships to reopen and holding off their vehicle purchases due to the current restrictions.”

Meanwhile, the Finance & Leasing Association (FLA) sees a balance between opportunities for growth further downturn thanks to Covid uncertainty. Respondents to the FLA’s Q1 Industry Outlook survey said 52% expect some improvement over the next twelve months, though 44% expect conditions to worsen.

However, the majority of respondents expected growth if the vaccine roll-out goes to plan.  And so far it’s on-target. Nearly 70% of respondents said that with a successful vaccine programme they expect an increase in new business, with over one third predicting an increase by 10% or more.

 The FLA’s Head of Research and Chief Economist at the FLA, Geraldine Kilkelly, said: “The results of the Q1 2021 survey reflect the industry’s concerns about the adverse impact of prolonged uncertainty on businesses and households….but also point to the underlying pre-crisis strength of FLA members which has helped them weather the pandemic so far.”

Meanwhile, SMMT chief Mike Hawes acknowledged the ‘difficult start’ to 2021 following the sector’s loss of over £20 billion in 20202.  The SMMT’s new car registrations forecast for this year has therefore been reduced to under 1.9 million, due to Covid restrictions particularly around the March numberplate change.

The SMMT reported the lowest January new car registrations since 1970.

So where do we all go with these figures,? Are we optimistic or pessimistic or neutral? You’re the ones that matter, the dealership owners and staff.  Please tell us your own experiences here