UK car market opens, but huge challenges ahead for sector, says GlobalData

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Following the news that car retailers in England are now open for in-person business under the government’s roadmap to ease population lockdown rules;

David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:

“This is clearly a welcome step for the UK’s automotive sector. While there have been many ‘click and collect’ innovations over the past year to support the vehicle market as much as possible, opening dealerships for visits is a major step forward.

“However, we should not lose sight of the fact that the UK’s automotive sector faces major challenges ahead. Lost sales this year will result in an annual new car market of around 1.8 million units, which is still over a fifth down on 2019’s 2.3 million sales.

“Moreover, we are still seeing the UK economy under considerable pressure and pandemic related problems around the world have not gone away, which means many export markets for the UK’s automotive industry are also at well below normal levels.

“For manufacturers in Britain there are additional supply chain challenges on a number of fronts and particularly an industry-wide shortage of critical semiconductors that will take longer than initially expected to resolve.

“We’re in an improving overall situation – much helped by vaccine rollouts – and that’s very welcome of course, but companies are still having to contend with the effects of the pandemic on economic activity, both in the UK and around the world. The recovery will take time.”

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