New car sales up, but pandemic and semiconductor shortage still impacting

Published:  05 July, 2021

New car sales were up 28% in June, with 186,128 sold during the month according to the latest figures from the SMMT, although the ongoing impact of the pandemic is still being felt, as well as the the global semiconductor shortage which is limiting supply.

While June’s sales were an improvement on the same month in 2020, registrations were actually down 16.4% when compared with the June average between 2010 and 2020, while total registrations for Q2 2021 were around 9,000 lower than expected. Overall, registrations for the first half of the year are down 26.8%.

Battery electric (BEVs) and plug-in hybrid vehicles (PHEVs) took a combined 17.2% of the market share, totalling 31,981 units. BEVs made up 10.7%, but PHEV uptake grew even faster for the third month running, following reductions to the Plug-in Car Grant in March.

Commenting on the figures, SMMT Chief Executive Mike Hawes 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. However, 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.”

Sue Robinson, Chief Executive of the NFDA added: “The increase in new car sales in June builds on the continued strong momentum. Retailers are seeing robust consumer demand and continued outperformance of the UK retail new and used car market. Franchised dealers are optimistic for trading over the summer albeit there will likely be a tightness in supply of new cars ahead as the shortage of semiconductors is hitting car production. We expect the industry to continue to perform well, with consumer confidence remaining high and retailers providing a first-class service to their customers.”

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