UK new car market recovery squeezed by supply issues

London – UK's new car registrations in June grew 28.0% year-on-year to 186,128 units, according to the Society of Motor Manufacturers and Traders' (SMMT) latest data. 

While the figure was higher than the 2020 levels, when the UK began to emerge from the first pandemic lockdown, it remained 16.4% below the 10-year average, said SMMT 5 July. 

Total registrations for the second quarter fell short of industry expectations by around 9,000 units, said SMMT, linking the decline partly to the ongoing global semiconductor shortage.

For the first half of the year, overall new car registrations stood at 910,000 units, 26.8% below the 10-year average, but 39% higher than last year.

Despite strengthening economic confidence and forecast of 8% GDP growth in 2021, new registrations “still remain adrift of pre-pandemic levels,” noted SMMT. 

To return to the previous decade average of 2.3 million new car registrations per annum, it said, “consumers need certainty about the future with long term government commitments to incentives.”

“With the final phases of the UK’s vaccine rollout well underway and confidence increasing, the automotive sector is now battling against a ‘long Covid’ of vehicle supply challenges,” said SMMT CEO Mike Hawes commenting on the latest data.

The semiconductor shortages, he went on to say, are affecting vehicle production, disrupting supply on certain models and restricting the automotive recovery. 

Hawes expressed hope that business and consumer optimism would improve further, and spending would increase following the planned ending of domestic restrictions later this month.