In March, the number of new cars in the UK fell -14.3% to 243,479 units, according to the latest figures from the Society of Engine Manufacturers and Dealers (SMMT).
In March, the number of new cars in the UK fell -14.3% to 243,479 units, according to the latest figures from the Society of Engine Manufacturers and Dealers (SMMT). Although manufacturers reported reliable order books in the first quarter, persistent shortages in the supply chain – especially semiconductors – continued to squeeze supplies in a month that is usually the busiest in the industry as buyers demand the latest license plates .
Thus, it is the weakest March since 1998, which was before the introduction of the two-plate system.1 Given that about 20% of the total number of annual registrations is usually registered in March, the result is very disappointing for the sector and highlights the long-term impact of the pandemic on the industry. Despite the rollback of pandemic restrictions that limited the industry to “push and take” in the first half of 2021, the total number of registrations in the first quarter of 2022 decreased by -1.9%.
While private registrations grew by 8.2% per month, in March 2021 exhibition halls closed due to social distancing rules. Meanwhile, the number of registrations of large fleets decreased by -34.4%, but the registration of enterprises increased by 20.0% as manufacturers gave priority to orders from private consumers and small businesses.
Rechargeable electric vehicles (BEVs) continued to grow tremendously: 39,315 new zero-emission vehicles left dealerships – up 78.7% from last year – and took market share of 16.1%. This is the highest volume of BEV registrations ever recorded in one month, and means that in March 2022, more were registered than in the whole of 2019.2 The number of embedded hybrid (PHEV) registrations decreased by -7.5% to 16,037 units, but hybrid (HEV) registrations increased by 28.4% to 27,737 units. As a result, more than a third (34.1%) of all registered new vehicles were electrified vehicles.
As the industry reports strong order books, it is supply constraints that are preventing the sector from moving towards full recovery. The shortage of semiconductors, in itself the result of a pandemic, is affecting the sector globally, but long-term uncertainty remains, and the invasion of Ukraine increases the risk to supply chains. However, in a broader sense, economic barriers such as rising energy costs, fuel costs, inflation and shrinking household incomes can affect demand for new cars. However, as grants on BEV continue until at least March next year, interest rates remain low and electric vehicles receive lower operating costs, there are significant benefits for drivers who can order new vehicles now.
Mike Howes, CEO of SMMT, said:
March is usually the biggest month of the year for the new car market, so these figures are very disappointing and open up problems. While demand remains strong, this decline shows the severity of the global semiconductor shortage as manufacturers seek to supply customers who are looking forward to customers with the latest vehicles with the lowest emissions. Placing orders will now be beneficial for those who want to take advantage of benefits and reduce operating costs for electric vehicles, especially since the crisis in Ukraine may further affect supplies. With rising spending on households and businesses, the government needs to do everything possible to support consumers so that it can sustain the growth of electric vehicles and meet the UK’s ambitious zero schedule.