UK car sales weakest since 2013 in August as supply chain issues continue

·2 min read
It was the weakest August since 2013 for car registrations in the UK. Photo: Getty
It was the weakest August since 2013 for car registrations in the UK. Photo: Getty

Global supply chain issues continued to hit the UK car market in August, as new registrations fell 22% year-on-year. 

According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT) 68,033 units were registered in what is traditionally one of the quietest months of the year for new car registrations, ahead of the important plate-change in September.

The monthly performance was the weakest since August 2013, and down 7.6% against the average recorded over the last decade, due in part to constrained supply as the global shortage of semiconductors — an issue born of the pandemic — continues to undermine production volumes.

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. 

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In fact, 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, with the range ever-increasing.

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. 

Graphic: SMMT
Graphic: SMMT

The mini segment was the only car body-style to see growth, up 30.7% — but with just 902 registrations it is a segment prone to greater fluctuations.

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 to August, illustrating the ongoing and wide ranging impact of the pandemic on automotive retail.

Economists at Pantheon Macroeconomics predict that car sales will return to pre-COVID levels in the first half of 2022. 

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