New cars sales accelerated 28 per cent annually in June, though registrations are still way behind pre-pandemic levels as the industry continues to struggle to deliver the latest models to customers.
Some 186,128 passenger vehicles were registered last month, which is an ‘artificial’ increase on last year, when showrooms were beginning to emerge from the enforced closures during the first lockdown in 2020.
Comparing registration figures to the 10-year average before the coronavirus, sales were down 16.4 per cent for June and a significant 26.8 per cent behind the half-year average, according to the Society of Motor Manufacturers and Traders.
That’s mostly due to the widespread shortage of semiconductor computer chips needed for the latest vehicles ‘squeezing’ the arrival of new models – though Tesla managed to deliver almost 5,500 Model 3 electric vehicles last month, which is more than any other car.
UK car sales squeeze: Registrations of new motors is being restricted by the shortage in supply of the latest models as a result of the global shortage of semiconductor computer chips, the SMMT said this morning. However, Tesla had no issues delivering Model 3s to buyers, topping the sales charts in June
The ongoing shortage of chips has forced a number of manufacturers – including Jaguar Land Rover and Mini in the UK – to pause production of new models that need them.
Some cars, like Land Rover’s latest Defender 4X4, are now subject to long customer waiting lists of up to a year, according to reports.
As a result, drivers looking to change cars or purchase their first model are – instead of waiting months for a new motor to arrive – turning to the used market, which has sent the values of second-hand vehicles soaring to record highs in recent months.
The chip issue is now the biggest factor crippling the sector’s recover from Covid, with total sales down 9,000 on the industry estimate for April to June.
New cars sales were up 28% year-on-year in June, though registrations are still way behind pre-pandemic levels as the industry continues to struggle to deliver the latest models to customers
The chip issue is now the biggest factor crippling the sector’s recover from Covid, with total sales down 9,000 on the industry estimate for April to June
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: ‘With the final phases of the UK’s vaccine rollout well underway and confidence increasing, the automotive sector is now battling against a “long Covid” of vehicle supply challenges.
‘The semiconductor shortages arising from Covid-constrained output globally are affecting vehicle production, disrupting supply on certain models and restricting the automotive recovery.’
Jamie Hamilton, automotive director and head of electric vehicles at Deloitte, said the poverty of semiconductors is likely to continued into next year.
‘Dealerships have less stock and many are even struggling to source display models for consumers to test-drive,’ he explained.
‘Unfortunately, there is little respite for the industry, with the semi-conductor shortage expected to continue causing issues throughout the rest of the year and maybe even into 2022.’
While the scant availability of chips is restricted market performance, the SMMT said there are positives to be taken from the growth in sales of electrified cars in June.
BEV and PHEV make up 17.2% of all new cars bought at the moment, though sales of pure-electric models have been hit by the reduction to the Plug-in Vehicle Grant in April
With the trade body’s latest research showing electrification could create 40,000 new jobs by 2030, plug-in vehicles continued to increase market share.
Combined, battery electric (BEVs) and plug-in hybrid vehicles (PHEVs) accounted for 17.2 per cent of new vehicles hitting the road (31,981 cars in total).
BEVs accounted for more than one in 10 registrations (10.7 per cent). PHEV uptake, however, continued to grow faster than BEV uptake for the third month running, following reductions to the Plug-in Vehicle Grant (PiVG) from April.
The continued growth in demand for electric vehicles comes in the wake of Nissan’s announcement last week that it is to build a battery gigafactory in the North East.
It will supply batteries to its Sunderland car plant, where a new plug-in crossover is due to be produced.
SMMT figures show that of the 19,842 BEVs sold in June, almost three in 10 (28 per cent) were Tesla’s Model 3.
Some 5,468 examples of the electric family saloon – which costs from £40,990 and £59,990 in the UK and is not eligible for the Government’s £2,500 PiVG – were purchased last month, making it the most popular new car in the country, out-selling the likes of the VW Golf, Vauxhall Corsa and Ford Fiesta.
It’s the fourth month since the pandemic struck that Tesla’s most affordable car has topped UK sales charts.
The Tesla Model 3 was the best-selling new car in June 2021, though it doesn’t make the top 10 of most popular passenger vehicles for the first half of the year
The Model 3 has now been the monthly best-selling car in the UK in four months since the pandemic struck
Mr Hawes said that with economic confidence strengthening, consumers will need ‘certainty about the future’ when it comes to EV ownership, which will require ‘long term government commitments to incentives, and confidence in the rollout of charging infrastructure nationwide’.
He added: ‘Rebuilding for the next decade is now well underway with investment in local battery production beginning and a raft of new electrified models in showrooms.
‘With the end of domestic restrictions later this month looking more likely, business and consumer optimism should improve further, fuelling increased spending, especially as the industry looks towards September and advanced orders for the next plate change.’
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