CEO Update

Supply challenges continue to delay recovery

10 June 2022 #CEO Update

Last month was another challenging one for UK Automotive, with the new car market declining by a fifth (-20.6%), the second worst May in three decades. Similarly, registrations of LCVs also declined for the fifth consecutive month, down a quarter (-25.1%).

The poor performance was driven largely by the global supply chain shortages that continue to hamper new purchases and the fulfilment of existing orders, despite manufacturers’ best efforts to ensure as many new vehicles as possible hit showrooms.

There was, however, one bright spot for both new car and van sales, with battery electric vehicle uptake increasing in both segments, up 17.7% and 46.5% respectively. If this momentum is to continue, however, and a robust, mass market for these vehicles created, we need to ensure every buyer, regardless of circumstance, has the confidence to go electric. Delivering net zero will be about decarbonising the entire fleet of vehicles on the road and a healthy new car market will be the quickest way to deliver those carbon savings.

The UK has amongst the most ambitious net zero policies in Europe, with a ban of sale of new ICE models from 2030, compared to the 2035 deadline agreed by the EU this week. With the Government’s ZEV mandate technical consultation ending today, SMMT, and the wider industry, are looking to ensure these proposals will actually deliver across the market.

Mandates alone, though, won’t be enough to guarantee the necessary carbon savings. There has to be an acceleration in the rollout of accessible charging infrastructure to match the increasing number of plug-in vehicles on the road as well as incentives for the purchase of new, cleaner and greener cars and a targeted plan for vans, if that strong market is to be delivered. Consumer confidence will be essential so every measure must be taken to help overcome rising inflation and the squeeze on household incomes.

Electrification will be high on the agenda at SMMT’s International Automotive Summit 2022, being held in London on Tuesday 28 June. This year’s agenda will also address sustainability, competitiveness, future workforce requirements and retail issues and, keynote speeches from leading stakeholders from the industry and government.

Tickets are available to purchase and SMMT Members are eligible for one complimentary ticket per member organisation (subject to availability). For information on tickets and sponsorship opportunities, please contact the Seventy Events team by email or call 0207 101 3185.

Finally, SMMT will be heading to EVS35 in Oslo this weekend. One of the world’s leading trade fairs for electro mobility, we will be hosting the UK pavilion in collaboration with the Advanced Propulsion Centre, Department for International Trade and Innovate UK. A number of cutting-edge UK EV tech and manufacturing companies will be heading out to seek new trading opportunities in a country which is making rapid progress on the journey to zero emission transport.

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