Business & Investment

UK new car sales plummet to July level, the lowest since 1998 due to lack of chips

The global shortage of chips used in vehicles means manufacturers can’t produce enough cars to meet demand-and delivery drip feeds are well below the 10-year average of registrations. Means that

New car registrations in the UK fell by a third each year in July, declining by more than a fifth on average over a 10-year month as the ongoing global shortage of semiconductor chips continues to plague the automotive industry. doing.

Official figures released today show that 123,296 new passenger cars were purchased in the UK last month. This is 29.5% less than it was a year ago, and the number of registrations in July was the lowest in 23 years.

The Motor Manufacturers Association said the sharp surge in car sales in July 2020 artificially expanded the scale of the decline. Motor dealers in the first month were allowed to resume open house following the first national Covid-19. Blockade.

However, despite ample demand for new cars, sales fell 22.3% from the 10-year average for the seventh month of this year.

Industry bosses have blamed the decline in registrations for both global chip shortages and reduced factory production as a result of the “pindemic.”

However, delivery log jams caused by a global shortage of semiconductors undoubtedly cause significant delays for customers waiting for new motors to arrive, but the staff shortage argument applies only to British-made vehicles.

Statistics show that the decline in registrations was primarily due to reduced deliveries of 61,140 units to large fleets, a decrease of more than a quarter (28.7%) of the average recorded over the last decade.

Personal registration did not decline much, down 10.7% to 59,841 new cars, but these numbers are further down in the remaining five months of the year as chips are projected to run short in 2022. There is likely to be.

As a result, the latest SMMT outlook has been revised downwards, and the number of registrations is currently projected to reach approximately 1.82 million units in 2021.

That’s still up about 11.7% in 2020, but down from the April 1.86 million forecast, down 21.8% from the average new car market figures dating back to 2010. I am.

Official figures released this morning show that 123,296 new passenger cars were purchased in the UK last month. This is 29.5% less than a year ago, with the lowest number of registrations in July in 23 years.

Official figures released this morning show that 123,296 new passenger cars were purchased in the UK last month. This is 29.5% less than a year ago, with the lowest number of registrations in July in 23 years.

Statistics show that the decline in registrations was primarily due to the reduction in deliveries to large fleets.

Statistics show that the decline in registrations was primarily due to the reduction in deliveries to large fleets.

Mike Hawes, CEO of SMMT, said:

“In the coming weeks, we’ll see changes in self-quarantine policies that help companies across the industry deal with staff absences, but semiconductor shortages can remain a problem for at least the rest of the year.

“As a result, we have slightly lowered the market outlook for 2021.”

Richard Pebadi, head of UK automotive at KPMG, said the number of vehicle registrations announced today “does not reflect actual demand.”

He explained: “Deeper into the data, it’s clear that supply chain challenges have curtailed production and extended delivery times for automakers. Simply put, fewer cars are in the front yard.”

The volume of vehicle registrations announced today

The volume of vehicle registrations announced today “does not reflect actual demand,” said Richard Pebuddy, head of UK automotive at KPMG.

AutoTrader’s commercial director, Ian Plummer, reiterated Peberdy’s comments.

“It’s easy to misunderstand these results as a decline in consumer demand for new cars, but our data show that it can’t be far from the truth.

“In fact, 1.4 million people watched new cars on auto traders in July, an increase of 6% compared to the July sales burst after the blockade last year, more than double the level of 2019. ..

“With such strong demand, we’re clearly at risk of a’seller market’at the moment, but with the potential for lost sales, it’s all for car brands and retailers. You can’t, but supply constraints are becoming more and more frustrating. The advantage of this bounce. “

As this is Money reported last monthThe knock-on effect of limited new car delivery has forced many impatient drivers to scrutinize the second-hand market in search of replacement motors.

According to Plummer, auto traders have found that three-quarters of car buyers are ready to buy a used car when they don’t have a new option. However, due to this surge in demand, used car prices rose 14.1% year-on-year, a record high. Year. He said this was “a trend that may also be seen in the new car market.”

The drip feed of new cars is beginning to affect the number of units sold per model, and in July Volkswagen Polo became the most purchased new car ahead of Toyota Yaris and Kia Sportage.

The best-selling car of the year, the Vauxhall Corsa, didn’t make it into the top 10, but the most popular model of the last 12 years, the Ford’s Fiesta, slumped in 9th place and the rankings were volatile. Indicates if there is. It is under the constraint of supply problems.

The VW Polo Super Mini was the best-selling new car in July, with over 3,000 registrations.

The VW Polo Super Mini was the best-selling new car in July, with over 3,000 registrations.

Ford's Fiesta closed the gap in July with its rivals not appearing in the top 10 most registered models, but the Voxor Corsa remains the country's most purchased new car in 2021.

Ford’s Fiesta closed the gap in July with its rivals not appearing in the top 10 most registered models, but the Voxor Corsa remains the country’s most purchased new car in 2021.

SMMT also confirmed that chip shortages are beginning to hit the new van market. The new van market recorded its first decline since December 2020, with registrations down 15% in July due to a shortage of new models.

Magazines and websites WhatCar? Jim Holder, editorial director of the company, said:

“But the challenge is for manufacturers and retailers to manage customer expectations and build pipelines in between, while supply is limited.

“Ultimately, the supply problem will go away, but only those who have invested in meeting customer expectations will be rewarded for doing so.

Electric vehicle sales continue to be on an upward track

Recent bumper growth for plug-in vehicles continued in July, with battery electric vehicles (BEVs) accounting for 9% of registrations and plug-in hybrids (PHEVs) reaching 8% of the market share.

With a total of 21,039 BEV and PHEV registrations, new cars with plugs rather than diesel were sold, and 15,592 conventional and mild hybrid oil burners were sold in July.

SMMT currently predicts that BEVs will account for 9.5% of registrations by the end of the year, while PHEVs are projected to account for 6.5% of the market, for a total of approximately 290,000 units by the end of the year.

Hawes described the increase in electric vehicle sales as a “bright spot” in the statistics, which consumers will see as “new technologies driven by increased product choices, financial and financial incentives, and enjoyable driving experiences.” It reflects that it is reacting more than before.

SMMT predicts that by the end of the year, BEVs will account for 9.5% of registrations, PHEVs will account for 6.5% of the market, and by the end of 2021, there will be a total of approximately 290,000 units.

SMMT predicts that by the end of the year, BEVs will account for 9.5% of registrations, PHEVs will account for 6.5% of the market, and by the end of 2021, there will be a total of approximately 290,000 units.

According to KMPG, the increase in sales is a direct result of more companies offering payroll schemes to staff in these vehicles and is as affordable as gasoline and diesel, which are major turning points in the battery-electric vehicle sector. Often choose a good price.

However, the rapid development of EVs could mean that today’s plug-in vehicles suffer from above-average depreciation as drivers are considering longer range and shorter charge time versions. I warned you.

“Interestingly, the demand for electric vehicles could drive a major shift to a leasing and subscription model in the medium term rather than full ownership,” Peberdy explained.

“Technology is advancing rapidly, and increasingly efficient and long-distance vehicles are set to roll off production lines soon.

“This poses the risk of faster depreciation for today’s models for consumers. Customers may want greater visibility and assurance about resale prices and total cost of ownership.

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UK new car sales plummet to July level, the lowest since 1998 due to lack of chips

https://www.dailymail.co.uk/money/cars/article-9864491/UK-new-car-sales-plunge-lowest-July-level-1998-chip-shortage.html?ns_mchannel=rss&ns_campaign=1490&ito=1490 UK new car sales plummet to July level, the lowest since 1998 due to lack of chips

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