CEO Update

Supply shortages more damaging for June registrations than lockdowns

08 July 2022 #CEO Update

A tumultuous week in Government against a backdrop of continuing uncertainty and instability for the industry, is highlighted by the latest registration figures announced this week.

The semiconductor shortage stifled the new car and van markets in June, even more than last year’s lockdown. Disappointingly, new car registrations were down -24.3% to just 140,948 units, marking the month’s weakest car performance since 1996 whilst the new van market fell -23.0% down to 26,443, the sixth consecutive month of decline.

Electric vehicle demand continues to be a bright spot, however, with more electric cars and vans than ever taking to UK roads. BEV registrations in both the car and van market increased by 14.6% and 52.4% respectively. The growth rates of electrified cars have slowed, however, and while this was expected as the market becomes more established, the slowdown is more than had been anticipated.

Part of this fall is attributable to the continuing supply chain shortages that are hampering production of all models, but the scrappage of the plug-in car grant means the UK is now the only major European market without purchase incentives for private EV buyers.

With drivers of cars and vans alike facing rising fuel costs, the switch to an electric vehicle makes ever more sense and the industry is working hard to improve supply and prioritise deliveries of these new technologies given the savings they can afford drivers.

More support will be needed to ensure that buyers have the confidence to transition to the cleanest and greenest vehicles of the future, and that manufacturers have the confidence to invest in the UK. This will ultimately depend on the competitveness of the UK as a market and manufacturing location which needs stability and certainty. It is essential, therefore that the uncertainty in Westminster is resolved quickly to reassure both consumers and the sector alike and keep the UK’s drive towards Net Zero on track.

Elsewhere this week, expressions of interests for SMMT’s Meet the Buyer, to be held on 2 November in Birmingham, are open. The event helps buyers meet suppliers that fit their needs at any point during their purchasing cycle and are regularly used by organisations of all shapes and sizes to find new suppliers, connect with old ones or to lay the foundations for future partnerships. To express your interest please click here.

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