Car dealers could be set for a Christmas sales bonanza as frustrated consumers splash the cash on new vehicles, according to the boss of Vertu Motors.
Robert Forrester said the company had seen a “sales rebound far exceeding what I thought was possible” after dealerships were forced to closed for more than two months because of the pandemic.
In the six months to the end of August, Vertu reported revenues a third lower at £1.1bn and pre-tax profits down 75pc to £3.9m. The number of cars sold fell by 68pc to 55,386.
But in the second quarter once the company’s 120 showrooms had reopened fully, revenue was 9pc higher than in the same period a year ago, and vehicle sales were just 1.4pc lower at 39,697.
Mr Forrester said: “Consumers have had a limited number of large things they can spend their money on. The two main choices are improve your house or buy new car.”
September - a key month for sales of new cars because of the registration plate change - was a record for the company, he added.
According to trade body the Society of Motor Manufacturers and Traders, September was the weakest month for the wider industry in 20 years, with overall new car sales down 4.4pc, and sales to private buyers slipping 1.1pc amid the pandemic.
However, Vertu's retail sales rose 6.3pc - a figure Mr Forrester said would have been higher if manufacturers had been able to deliver more vehicles. Supplies remain constrained because factories are not yet working at full speed.
“This Christmas could see very strong sales,” he said, adding that "general boredom" may drive sales to cash-rich motorists.
Last September's sales figures had been skewed by “tactical and pre-registering” sales - where dealers bring forward sales to boost their performance - and meaning that this year’s data gave a truer picture of the market, Mr Forrester added.
Working through the lockdown to sell cars online showed the company how to eliminate paperwork and increase automation, helping to produce £10m of annual savings and leading to 345 redundancies, leaving about 5,400 staff.
Mr Forrester said Vertu - which has not taken government loans - would not be repaying furlough payments to subsidise staff wages when its showrooms were closed. “We are grateful for the support which protected well-run businesses such as ours but there is no rationale to pay it back whatsoever.”
The company cancelled its final dividend and said it “anticipates” the payment will resume in the next financial year.
Shares slipped 1pc to 31.1p. They started the year at 38p.