UK new car registrations fell further in July amid ongoing supply issues, with the Society of Motor Manufacturers and Traders reporting 9% fewer registrations year-on-year, to 112,162 units.
The result marked the fifth consecutive month of declines, although it was the smallest fall recorded so far this year.
Ongoing global supply chain issues, primarily the lack of semiconductors, continued to frustrate order fulfilment, exacerbated by Covid lockdowns in key manufacturing and logistics centres in China, as well as disruption from Russia’s ongoing invasion of Ukraine, the industry body said.
Declines were mainly driven by an 18.2% fall in registrations by large fleets to 50,014 units, while consumer registrations “remained steady” at 59,847 units.
As a result, private registrations in the year to date were now up 3.7% on 2021, as manufacturers prioritised private customers.
“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.”
Battery electric vehicle uptake grew 9.9% to 12,243 units to achieve a 10.9% market share for the month.
Although it was the weakest monthly uplift recorded by battery electric vehicles since the Covid-19 pandemic began, overall growth in the year had reached 49.9% to deliver a 13.9% market share, which the SMMT said illustrated the volatility in the supply chain.
July was a weaker month for hybrid electric vehicle uptake, meanwhile, with registrations falling 6.7% to take 12.2% of the market, while plug-in hybrids fell 34%, cutting their market share to 5.8%.
The SMMT said the first half of the year had proved “more challenging” than expected, due to the “enduring severity and impact” of the semiconductor shortage and global conflict.
It said that while the sector expected the second half to improve as supply issues started to recede, it was unlikely that the market would be able to recover the significant losses sustained so far.
The outlook for the full year was thus revised downwards to 1.6 million new car registrations, making for a 2.8% fall on 2021, with the industry facing its most challenging year for three decades.
Around two million registrations had been lost since Covid, effectively representing a loss of a year’s registrations.
Plug-in market share would continue to grow, however, to reach 22.6% as manufacturers prioritised investment in zero-emission vehicle production, the SMMT claimed.
Likewise, although the 2023 outlook had also been revised downwards since the April estimate, it was likely to be an improvement on 2022, with overall registrations expected to reach to 1.89 million units rather than 2.02 million, with plug-ins comprising 27.8% of the market.
Reporting by Josh White at Sharecast.com.