New car registrations have fallen for the fourth consecutive month, with a decline of 24.6% to 106,265 units compared to October last year, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).
Plug-in vehicle uptake remained positive in the month before COP26, with battery electric vehicles (BEVs) equalling their September market share of 15.2% with 16,155 units, while plug-in hybrid vehicles (PHEVs) grew to 7.9% or 8,382 units.
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Plug-in vehicles now account for 16.6% of all new car registrations in 2021, which, when joined by a further 9.1% from hybrid electric vehicles means that 25.7%, or more than a quarter of the new car market, has been electrified year-to-date.
In fact, plug-in vehicle uptake rates have accelerated so rapidly that SMMT forecasts that more will join Britain’s roads in 2021 than during the whole of 2010 to 2019 combined. Businesses and consumers are expected to take up around 287,000 of the latest zero-emission capable cars by the end of the year.
Despite this strong performance in electrified vehicle registrations, the overall market’s monthly performance was the weakest seen since October 1991. Demand from large fleets fell by a substantial 40.4%, driving most of the decline. Private demand fell by a more modest 3.3%, although this apparent small decline is compared against weak consumer uptake during the pandemic-affected October 2020.
Looking ahead, the latest SMMT forecast has been revised downward by 8.8% to 1.66m units, in light of the on-going supply issues and deteriorating economic outlook. This would see 2021 finish 1.9% or some 30,000 units up on 2020, but some 650,000 units down on 2019’s pre-pandemic 2.3m performance.
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By GlobalDataA partial recovery, however, is forecast for 2022, with the industry anticipating some 1.96m new car registrations next year. This will be driven by continued demand for plug-in vehicles, which is expected to continue at pace with new BEVs anticipated to be more popular than new conventional and mild-hybrid diesels by the end of 2022. Plug-in cars are also expected to account for more than a fifth (21.5%) of all new car registrations next year.
Mike Hawes, SMMT chief executive, said: “The current performance reflects the challenging supply constraints, with the industry battling against semiconductor shortages and increasingly strong economic headwinds as inflation rises, taxes increase and consumer confidence has weakened.
“Electrified vehicles, however, continue to buck the trend, with almost one in six new cars registered this year capable of zero-emission motoring, growth that is fundamental to the UK’s ability to hit its net zero targets. With next year looking brighter, and even more new models expected, the continuation of this transition will depend on the preservation of incentives that overcome the affordability barrier, and the ability of the public and private sectors to increase public on street charging to allay EV driver concerns.”
October industry reaction
Sean Kemple, managing director of Close Brothers Motor Finance, said: “October has seen yet another 24.6% drop in new car sales. The supply chain pressures are unlikely to ease up this side of Christmas and the ongoing chip shortage, compounded by rocketing manufacturing costs, continues to present challenges for dealers and carmakers, and push up prices for consumers. Disappointingly, the Chancellor’s Autumn Budget offered little in the way of immediate support for an industry battling severe production constraints.”
Meryem Brassington, electrification propositions lead at Lex Autolease, said: “The continued uptake of electric vehicles is clear evidence that momentum continues to shift away from petrol and diesel. As electric vehicles continue to increase their market share, sustained investment from policymakers to facilitate the journey towards an electric future will be critical. The government’s EV infrastructure and manufacturing commitments in the Net Zero Strategy are a step in the right direction, while innovation and the decarbonisation of road transport is needed to drive forward the transition to zero emission vehicles.”
Ian Plummer, Commercial Director of Auto Trader, said: “The new car supply squeeze continues to have an inflationary impact on the used car market. In October the average price of a used car increased over 25% YoY. That’s 19 consecutive months of price growth. In fact, astonishingly nearly 1 in 4 ‘young’ used cars on Auto Trader are now priced higher than their brand new equivalents with nearly half within 5% of that new car price The old adage about new cars plummeting in value as soon as you drive them off the forecourt seems to be consigned to history – or at least suspended.”
James Fairclough, chief executive of AA Cars, said: “The standout performers of the UK’s new car market remain electric vehicles. Battery EVs accounted for a record 15% of all new car sales in September and October. EVs and hybrids now account for nearly a third of the cars made in UK factories, their highest ever level.
“October’s double whammy of fuel shortages and rapidly rising fuel prices certainly gave EVs the best possible advert, encouraging many buyers who had already been considering a switch to an EV to bring forward their decision.”
Karen Hilton, chief commercial officer at heycar, said: “Expert staff have never been more necessary, to provide reassurance and guide car-buyers through the complex changes ahead – from the switch to electric vehicles (EVs), 2030 ban on new petrol/diesel vehicles, expansion of low-emission zones nationwide and the rise of semi-autonomous technology.”
