Car industry suffers worst June since 1996

Global supply issues continue to challenge car manufacturers, as last month marked the worst June for new car sales since 1996. Find out how this is impacting car prices, delivery times and adoption of electric vehicles, in this article by Neil Lancefield from the Press Association.

The UK automotive industry suffered its worst June for new car sales since 1996.

Registrations of new vehicles fell by 24.3% last month compared with June 2021, according to the Society of Motor Manufacturers and Traders (SMMT).

Global shortages of components such as semiconductors continue to hamper manufacturers’ ability to fulfil demand, with 141,000 new cars registered in June, the trade body said.

Drivers are having to wait more than 12 months to take delivery of some models.

Only 802,000 new cars were sold during the first half of the year.

That was an 11.9% reduction compared with the same period in 2021, and represents the industry’s weakest January-June performance since 1992, except for 2020, which was affected by the coronavirus pandemic.

SMMT chief executive Mike Hawes said: “The semiconductor shortage is stifling the new car market even more than last year’s lockdown.

“Electric vehicle demand continues to be the one bright spot, as more electric cars than ever take to the road.

“But, while this growth is welcome, it is not yet enough to offset weak overall volumes, which has huge implications for fleet renewal and our ability to meet overall carbon reduction targets.

“With motorists facing rising fuel costs, however, the switch to an electric car makes ever more sense and the industry is working hard to improve supply and prioritise deliveries of these new technologies given the savings they can afford drivers.”

Jim Holder, editorial director of magazine and website What Car?, said car buyers are being hit by a combination of issues.

New car orders are delayed, while rising energy bills are pushing up manufacturing costs, which is increasing prices.

“The result is longer waiting times on cars which will cost more to buy,” he warned.

Separate figures from green motoring consultancy New AutoMotive show 16% of new cars registered in June were pure electric, up from 11% during the same month last year.

The company’s co-founder, Ben Nelmes, said electric cars “defied gravity” last month by “continuing to grow while overall new car registrations were down by a quarter”.

Rising petrol and diesel prices are “driving consumers towards electric cars” but the supply of vehicles “cannot keep pace with demand”, he warned.

“We hear that delivery times for electric cars are now between 40 weeks and a year.

“The supply of electric vehicles is the biggest barrier to cleaner road transport in the UK.”

The Government is planning to adopt a zero emission vehicle (ZEV) mandate, which will require manufacturers to sell a certain percentage of those cars and vans from 2024.

Mr Nelmes urged ministers to ensure the level is “stronger” than the proposed 22%, to “attract more electric vehicles to the UK”.

“Year to date registrations reach 802,079 units – a fall of -11.9% on last year, and second weakest first half for 30 years

Battery electric vehicles continued their growth streak, however, with a 14.6% increase in volume.”

— SMMT (@SMMT on Twitter), July 5, 2022

Alex Buttle, co-founder of used car marketplace Motorway.co.uk, said: “Sales of both new and used electric vehicles (EVs) are soaring right now.

“If the Government can deliver on its charging infrastructure plans, based on the recent trajectory it will only be a few years before EV sales outstrip petrol and diesel sales combined.”

The UK has pledged to reach net zero for carbon emissions by 2050.

The help achieve this, sales of new petrol and diesel cars and vans will be banned from 2030.