Car sales figures in Northern Ireland for the year to September 2020 were twice as low as the decline seen in 2008, at 34.6% new figures show.
And SMMT's New Car Registrations for September 2020 revealed that the pent up demand for new cars as a result of lockdown is coming to an end as last month saw 5010 new cars registered here, down from 5140 in September 2019.
Ulster Bank chief economist, Richard Ramsey said: "Northern Ireland's new car sales recovery appears to have run out of gas at the end of the third quarter. Local showrooms witnessed a 6% y/y rise in new vehicle sales in Q3 which represented the first quarterly rise since Q2 2019. However, this was driven by sales outperformance in July (+ 17% y/y) and August (+6.6% y/y). Dealers sold 5,010 new cars in September, a decline of 2.5% on the same month a year ago. This suggests that the pent-up demand evident within the July and August figures may have been and gone. A few months of post-lockdown outperformance had been expected, but this upswing now seems to be even shorter and more subdued than originally anticipated.
"Traditionally new car sales are a bellwether for consumer confidence and by extension the economy. 2020 looks set to be the sixth successive year of flat or falling new car sales with 2014 the last time Northern Ireland dealers posted a meaningful increase.
"The decline in 2020 so far is twice the scale of the fall in sales in 2008. 2021 will see a meaningful pick-up but to what level remains to be seen. The pandemic, subsequent lockdown and reopening of the economy have seen many sectors grind to a halt and subsequently rebound. But the resurgence of new cases of COVID-19, alongside a tightening of restrictions, will undoubtedly impact on consumer confidence. Furthermore, with the Job Retention Scheme expiring at the end of October, and unemployment expected to be catapulted higher in Q4 2020 and Q1 2021, consumer confidence for big ticket spending items is expected to remain fragile for some time yet."
Mr Ramsey said a drop in demand could lead to job losses in the car sales sector, adding: "Unlike during the last recession, so far there have been no targeted measures (e.g. 'cash for clunkers' scheme or VAT reduction) to stimulate demand. Looking ahead, the best the car industry can hope for is a range of environmental incentives to encourage motorists to switch to electric vehicles. But with many people working from home and shunning the daily commute, those incentives may not be as effective as they once were before the pandemic."
The Ford Fiesta was the number one selling new car marque here last month with 190 leaving showrooms.
It was followed by the Hyundai Tucson, Ford Kuga, Nissan Qashqai and the Ford Focus.
The number one best-selling new car in Northern Ireland over the past year is the Ford Fiesta, with 833 in total sold at the last count.
The worst hit UK region for new car sales to date is Scotland which suffered a drop of -35.27%. It was followed closely by Northern Ireland at -34.64% and England at -33.27%.
Wales fared best with a sales decrease of 25.9%.