LONDON -- Automakers have welcomed the UK's relaxation of rules covering new-car purchasing under lockdown but warned that any market recovery is dependent on the full reopening of dealerships.
Dealerships in the UK, Europe's second largest car market after Germany, have been told they can operate a 'click and collect' service where the customer can pick up a car they have purchased online after the Government relaxed its lockdown regulations from Wednesday.
"We welcome the clarification that automotive retailers can now operate contactless services," the chairman of UK automakers' association the SMMT, Mike Hawes, said in a statement.
"Re-opening car showrooms is now a crucial next step in rebooting the wider industry." Dealerships in the country have been closed since late March, although deliveries have been allowed in recent weeks.
Automakers in Europe who have already re-opened plants are struggling to find customers for cars. VW has already had to throttle back production at its flagship Wolfsburg plant in Germany after restarting in April, citing weak demand.
Vauxhall will restart van production on Monday at its Luton, UK, plant but the company's managing director said it was vital showrooms opened. "We need to have orders for the vehicles we're setting out to produce," managing director Stephen Norman told the BBC. "The key blocking point.. is the opening of car dealerships in the UK. We'd like that to happen today and certainly at the latest at the end of this week."
Ford warned that that its production output would be well below capacity until dealerships are fully opened. "The vehicle plants are onstream in Europe but again it will take a number of months before we see production ramping to normal levels," a spokesman said. "A key factor will be getting the UK dealerships able to sell again." The UK is Ford's biggest European market.
The company has announced its two engine plants in the UK will reopen on May 18. Ford's European vehicle assembly plants started on May 4.
UK registrations dropped 97 percent to just 4,321 in April as a result of the dealership closures after the government-imposed lockdown regulations designed to stop the spread of the coronavirus. The figure was the lowest since February 1946, when the country was trying to rebuild again after World War II.
The UK's largest vehicle assembly plants remain shut. Those plants that have reopened such as Aston Martin's St Athan facility, Jaguar Land Rover's Solihull plant and Bentley's Crewe facility, are mainly targeting the recovering Chinese market.
The UK's largest assembly plant, operated by Nissan in Sunderland, will restart production early June, the company said.
Automakers in the UK have unveiled a series of offers designed to get customers buying again, including deferring payments. Ford has extended a scheme allowing customers to pause payments for three months on certain new vehicles to the end of May.
Skoda this week also rolled out finance plans for the bulk of its range whereby the company pays the first three monthly instalments. Seat has a similar scheme that pays the first three months of a finance deal, as well as lowering the initial deposit.