car manufacturing

UK automotive sector faced weakest July sales in decades

Just over 120,000 new cars were registered in the UK this July in the weakest performance that the domestic sector has seen since 2000, the Society of Motor Manufacturers and Traders (SMMT) has said.

A combination of supply chain shortages and the ‘pingdemic’ have frustrated attempts to boost sales with industry estimates for the year being revised down to 1.82 million units.

A total of 123,296 new cars were registered in the UK last month, representing a 29.5 per cent decline from July 2020.

But purchases of plug-in vehicle have bucked the trend, accelerating to 17.1 per cent of market with 21,039 units registered in July. Electric vehicles are now expected to account for more than one in six new cars acquired in 2021, a necessary uptick ahead of the ban on sales of new petrol cars from 2030.

The SMMT said that Britain’s most popular types of cars remained superminis (32.9 per cent of registrations), lower medium (28.0 per cent) and dual purpose (27.3 per cent).

While the UK’s economic outlook continues to strengthen, with most consumer indicators suggesting a greater appetite for spending, including on so-called ‘big ticket’ items, supply challenges continue to throttle growth with the weaker market conditions expected to continue in August.

Mike Hawes, SMMT chief executive, said: “The automotive sector continues to battle against shortages of semiconductors and staff, which is throttling our ability to translate a strengthening economic outlook into a full recovery.

“The next few weeks will see changes to self-isolation policies, which will hopefully help those companies across the industry dealing with staff absences, but the semiconductor shortage is likely to remain an issue until at least the rest of the year.

“As a result, we have downgraded the market outlook slightly for 2021. The bright spot, however, remains the increasing demand for electrified vehicles as consumers respond in ever greater numbers to these new technologies, driven by increased product choice, fiscal and financial incentives and an enjoyable driving experience.”

Jim Holder, editorial director of magazine and website What Car?, said: “The appetite for car buying is clearly there, particularly as people reward themselves after lockdown.

“But the challenge is for manufacturers and retailers to manage customer expectations and to build pipelines in the meantime, while supply is limited.

“Ultimately, the supply issues will lift – but only those who have invested in servicing customer expectations will be in a position to reap the rewards as they do so."

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