Sales of new cars slipped to the lowest October level since 1991 as registrations were down by a quarter for the month, predominantly due to the ongoing lack of semiconductor chips crippling deliveries of the latest motors.
However, experts are warning that more difficult months could follow for the industry, predicting shakier consumer confidence in the face of rising interest rates that could make people reconsider big-ticket purchases.
While overall registrations were down year-on-year, sales of electrified models held steady, as the trade body said it expects to see battery-electric car sales eclipse diesels next year.
New car sales slump in October: Motor registrations dropped by a quarter last month to the lowest level since 1991, official stats have confirmed this morning
Some 106,265 new cars entered the road last month, which is a 24.6 per cent decline on 2020 figures and the lowest recorded sales for the tenth month for three decades.
The Society of Motor Manufacturers and Traders said the slide was again the result of global computer chip shortages, which has restricted production lines around the world and causes significant delays to order deliveries – in some cases extending arrival dates by over a year.
This has in recent months seen more drivers turn to the used market – a move which has sparked a surge in values with many paying more for a second-hand car than what they would if they bought it brand new.
Mike Hawes, SMMT chief executive, said October sales reflected ‘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’.
Richard Peberdy, UK head of automotive at KPMG, also predicted more difficult months ahead for the automotive sector as consumers face increasing living costs.
He said: ‘October is traditionally a quieter month after September’s plate change.
‘But a gloomy picture is compounded by fewer cars rolling off production lines due to supply chain challenges, and the beginnings of shakier consumer confidence with the looming threat of interest rate rises.’
Some 106,265 new cars entered the road last month, which is a 24.6 per cent decline on October 2020 and the lowest recorded sales for the tenth month for three decades
As a result of a fourth consecutive month of falling sales, the SMMT has again downgraded its annual forecast by 8.8 per cent, estimating that just 1.66 million new cars will hit the road in 2021.
This would see 2021 finish 1.9 per cent – or some 30,000 units – up on 2020, but some 650,000 units down on 2019’s pre-pandemic 2.3 million performance.
The trade body has predicted a partial recovery, however, for 2022, with industry anticipating some 1.96 million new car registrations next year, mostly off the back of ever-increasing demand for low-emission vehicles, which it says will almost certainly see pure-electric models overtake diesel sales in the next 12 months.
Plug-in vehicle uptake remained positive in the month before the COP26 climate change summit, in which they have been heavily promoted as a means of nations hitting carbon-neutral targets.
The SMMT has now downgraded full-year sales expectations to a total of 1.66 million
With BEV sales booming, the SMMT says zero-emission models will sell in greater numbers than diesels in the UK in 2022
In October, battery electric vehicles (BEVs) matched their September market share of 15.2 per cent of all new registrations (16,155 electric cars), while plug-in hybrid vehicles (PHEVs) grew to 7.9 per cent in the same month.
Plug-in vehicles now account for 16.6 per cent of all new car sales in 2021 and, when including conventional self-charging hybrids, low emission models represent a quarter of the sales market.
Hawes said: ‘Electrified vehicles 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.’
KPMG says record petrol and diesel prices have also contributed to an increase in EV demand in the last month – when both fuel types eclipsed the highest prices seen in 2012 – though warned that plug-in cars could also bit hit with higher ‘fuelling’ bills.
‘The impact that record high fuel prices will have on pushing motorists towards electric vehicle options shouldn’t be understated,’ Richard Peberdy added.
‘Yet EVs aren’t insulated from the wider energy crisis. A tough winter for energy companies will make plug-in drivers think carefully about their tariffs to avoid unexpectedly high bills.’
In terms of the most popular models, Volkswagen’s Polo supermini topped sales in October, with 3,167 registrations. It was just ahead of the Mini hatchback, all-new Nissan Qashqai and the always-in-demand Ford Focus.
Tesla’s Model 3, which was the best-selling car last month, didn’t feature in the top 10 list – which is more evidence of the electric vehicle maker’s push for deliveries predominantly in the months at the end of each quarter.
Vauxhall’s Corsa, which was the fifth most-bought new car in October, has also extended its lead at the top of the sales charts for the year in full, racing to 35,183 registrations – almost 7,500 units ahead of the Ford Fiesta, which has been the nation’s most popular model for 12 years running.
The Volkswagen Polo was the best-selling new car in October, marginally beating the Mini hatchback
Tesla’s Model 3, which was the best-selling car last month, didn’t feature in the top 10 list – which is more evidence of the electric vehicle maker’s push for deliveries predominantly in the months at the end of each quarter
The Vauxhall Corsa extended its lead at the top of the 2021 sales charts – it’s now 7,500 units ahead of the Ford Fiestas
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