UK: Mixed results for new car market in January amid ongoing troubles

The new car market’s struggles continued in January as a major automotive industry body blamed “headwinds” for stunting recovery from the pandemic. Issues with supply kept registrations in check, but data from the Society of Motor Manufacturers and Traders (SMMT) showed 115,000 new cars hit the road last month.

That figure represents a 27.5-percent increase on January 2021, but coronavirus lockdown restrictions meant showrooms were closed and sales were subdued. Compared with the pre-pandemic month of January 2020, however, sales were still down by 22.9 percent.

According to the SMMT, the global chip shortage continues to limit supply, and that meant registrations were lower than might otherwise have been the case. And the organisation also blamed the increasing cost of living and rising inflation for the reduction in sales.

However, the electric car market fared surprisingly well, with battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) cars accounting for 71.5 percent of the increase in registrations. Plug-in vehicles sold particularly well, with 14,433 BEVs and 9,047 PHEVs registered – accounting for around a fifth (20.4 percent) of the market overall. And with 13,492 HEVs also registered, almost one in three new cars that hit the road in January had some form of electric propulsion.

That said, petrol power still reigns supreme, with more than 66,000 new petrol cars arriving last month. That includes vehicles with mild-hybrid technology, but it means almost six in 10 new cars used petrol power to drive the wheels.

The SMMT is forecasting BEV sales growth of 61 percent in 2022, while PHEV sales are expected to increase by 42 percent. By the end of the year, almost one in four new cars are expected to come with a plug.

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This year’s overall new car registrations are expected to rise 15.2 percent on 2021, with just under 1.9 million vehicles registered by the end of December. Should that come to fruition, the market would still be down 17.9 percent on the pre-pandemic 2019, but SMMT expects the real recovery to happen in 2023, when projections suggest the market will climb above two million units for the first time since 2019.

Find out about the UK's best-selling cars:

The UK's best-selling cars of 2021

“Given the lockdown-impacted January 2021, this month’s figures were always going to be an improvement but it is still reassuring to see a strengthening market,” said SMMT chief executive Mike Hawes. “Once again it is electrified vehicles that are driving the growth, despite the ongoing headwinds of chip shortages, rising inflation and the cost-of-living squeeze. 2022 is off to a reasonable start, however, and with around 50 new electrified models due for release this year, customers will have an ever greater choice, which can only be good for our shared environmental ambitions.”

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