UK new car registrations fell 22% in August, marking the weakest monthly performance since August 2013, according to the latest SMMT figures.
Production volumes continue to be hampered by the semiconductor shortage and other supply issues.
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Demand for the latest battery electric (BEV), hybrid (HEV) and plug-in hybrid (PHEV) vehicles, however, surged, up 32.2%, 45.7% and 72.1% respectively. Demand for PHEVs has outpaced BEVs in five of the last six months since changes to the Plug-in Car Grant, affecting BEVs, were introduced in March. There are now some 130 plug-in models on the market.
Registrations by private, business and fleet buyers all fell by double digits in the month with fleet purchases down 27.5%, a loss of 12,627 units. Private activity held up better, registrations dropping -15.2% to 33,771 units, meaning that just shy of half (49.6%) of all sales in August were driven by private consumers.
So far this year, UK new car registrations remain up 20.3%, to 1,101,302 registrations, an increase of 185,687 units with BEVs and PHEVs at 8.4% and 6.6% market share respectively. However, this performance is measured against the Covid-hit 2020 market, when showrooms were closed for much of the year. Total registrations in 2021 are -25.3% below the 10 year average for the period January – August.
Mike Hawes, SMMT chief executive, said: “While August is normally one of the quietest months for UK new car registrations these figures are still disappointing, albeit not wholly surprising. The global shortage of semiconductors has affected UK, and indeed global, car production volumes so new car registrations will inevitably be undermined. Government can help by continuing the supportive Covid measures in place currently, especially the furlough scheme which has proven invaluable to so many businesses.
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By GlobalData“As we enter the important September plate-change month with an ever-increasing range of electrified models and attractive deals, buyers in the market for the new 71 plate can be reassured manufacturers are doing all they can to ensure prompt deliveries.”
Industry reaction
Sue Robinson, chief executive of the NFDA, said: “It is encouraging to see that strong sales of electrified vehicles partly offset the monthly decline. Year to date, the market is 20% above last year, although the overall performance is not yet at pre-pandemic levels.
“Despite the decrease in new car registrations, franchised vehicle dealers are optimistic about their prospects for the remainder of the year as consumer confidence remains robust, as demonstrated by buoyant sales of used and nearly new cars.
Ian Plummer, commercial director of Auto Trader, said: “On the surface, all our demand-side metrics are pointing towards a very positive September; not only have we seen the largest August on record for the number of cross platform visits to the Auto Trader marketplace (70.m), but the number of new car leads sent to retailers hit an all-time record in August proving that there are certainly plenty of car buyers hunting their next new car.
“However, while this may well help to build retailer order banks for future deliveries, the frustrating reality is that it’s likely the September market will fall well short of matching this strong demand with enough new car supply due to the ongoing global shortage of semi-conductors.”
Karen Hilton, chief commercial officer at heycar, said: “Our own industry research indicates that manufacturers fear it could take until 2024 for global supply to fully meet demand – which is prompting them to take unprecedented action in a bid to reduce spiralling lead times, of up to six months for some of the UK’s most popular models.
“The result is the biggest wholesale transformation in car production in decades – inspired by the tech giants of Silicon Valley. To streamline manufacturing – they long ago abandoned offering customers the ability to customise products in anything other than the most minor way.
“And so will it be with cars. Gone will be the ability to endlessly modify a vehicle down to the tiniest bespoke detail. In its place will be models and trims with specs that are fixed and a reduced number of options to add on top.”
James Fairclough, chief executive of AA Cars, said: “With both the economy and consumer confidence recovering well, motorists are steadily returning to forecourts – and last week’s arrival of the new registration plates should give the market an additional lift in September.
“But the mismatch between customer demand and the constrained supply of new cars for sale means much of the action has shifted to the second-hand market, where buyers can traditionally get a nearly-new car for significantly less money than a new one.”
