UK new car sales down again but electric cars continue to buck trend

A leading industry body says supply issues are expected to improve in the second half of 2022.

Smiling woman buying car at dealership with salesman

James Fossdyke

By: James Fossdyke

Aug 5, 2022 at 3:40am ET

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UK new car registrations fell by nine percent last month as supply issues continue to hit the industry hard, according to new figures released this week. Data from the Society of Motor Manufacturers and Traders (SMMT) showed a total of 112,162 new cars hit the road during the month of July.

That figure represents a nine-percent drop compared with the 123,296 cars registered during the same month last year. It’s also the fifth consecutive month of decline, although it’s the smallest reduction in sales recorded this year.

According to the SMMT, the decline is driven by “ongoing supply chain issues”, including the lack of semiconductors, which is being exacerbated by coronavirus lockdowns in China and disruption caused by the war in Ukraine. As a result, the organisation says factories have struggled to fulfill orders.

Car salesman working with client in dealership

However, despite these difficulties, electric car sales seem to be bucking the trend, with more than 12,000 examples registered in the UK last month. That’s up 9.9 percent compared with the same month last year, and it gave battery-electric cars a market share of just under 11 percent for the month – up from nine percent in July 2021.

Sales of hybrid and plug-in hybrid vehicles, on the other hand, were not so impressive, with registrations down by 6.7 and 34.0 percent respectively. Even so, hybrids managed to increase their market share slightly, up from 11.9 percent in July 2021 to 12.2 percent in July 2022.

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Because of these results, the SMMT has revised its industry outlook for the year, expecting total new car registrations in 2022 to be 2.8 percent lower than in 2021. The organisation says it expects supply issues will “start to recede” in the second half of 2022, but it still believes the market will struggle to recover from the “significant losses sustained so far”. So far, the SMMT claims around two million registrations (the equivalent of a year’s sales) have been “lost” since the beginning of the pandemic.

“The automotive sector has had another tough month and is drawing on its fundamental resilience during a third consecutive challenging year as the squeeze on supply bedevils deliveries,” said SMMT chief executive Mike Hawes. “While order books are strong, we need a healthy market to ensure the sector delivers the carbon savings government ambitions demand. The next Prime Minister must create the conditions for economic growth, restore consumer confidence and support the transition to zero emission mobility.”

More on new car sales in the UK and Europe:

Global plug-in electric car sales reached new record in June 2022: Over 913,000

UK: Cost-of-living crisis delays car purchases

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