The UK car industry has downgraded its forecast for the number of cars it expects to sell this year by 9 per cent, after figures for April revealed another disappointing month of registrations.
The Society of Motor Manufacturers and Traders (SMMT) said it had slashed its annual sales prediction from 1.89million new cars to just 1.72million, as the sector continues to struggle against a tide of semiconductor shortages and additional supply chain issues resulting from the conflict in Ukraine.
The reduction comes as the number of new cars registered in April fell by 15.8 per cent year-on-year.
The UK car industry has downgraded its forecast for the number of cars it expects to sell this year by 9% as the sector continues to struggle against the tide of supply chain issues
Some 119,167 new cars were registered last month, down from 141,583 in April 2021.
This is despite lockdown restrictions meaning showrooms were closed for the first 11 days of April a year ago.
Sales are still being hampered by lower vehicle production as a direct result of there being fewer parts, especially semiconductors.
It means customers who want to buy a new car are having to wait months – even a year – for their new motors to arrive and therefore be registered.
SMMT chief executive Mike Hawes said: ‘The worldwide semiconductor shortage continues to drag down the market, with global geopolitical issues threatening to undermine both supply and demand in the coming months.
‘Manufacturers are doing everything they can to deliver the latest low and zero emission vehicles, and those considering purchase should look to place their orders now to benefit from incentives, low interest rates and reduced running costs.
‘Accelerating the transformation of the new car market and the carbon savings demanded of road transport in such difficult times requires not just the resolution of supply issues, however, but a broader package of measures that encourages customer demand and addresses obstacles, the biggest of which remains charging anxiety.’
Some 119,167 new cars were registered last month, down from 141,583 in 2021. This is despite lockdown restrictions meaning showrooms were closed for the first 11 days of April a year ago
The Society of Motor Manufacturers and Traders has downgraded its annual sales prediction from 1.89million new cars to just 1.72million due to the supply chain crunch
Jim Holder, editorial director of magazine and website What Car?, said the latest monthly figures show the automotive industry is ‘in an increasingly precarious position’.
It has invested billions of pounds in developing new vehicles – including a raft of electrified models – but output is being ‘strangled by world events’ such as a semiconductor shortage and the war in Ukraine, he explained.
‘While profitability is high, the industry cannot expect to thrive in such a challenged market indefinitely – and likewise consumers cannot carry the burden of paying rising prices unchecked, especially as the cost of living elsewhere puts a focus on non-essential spending,’ Mr Holder added.
Jamie Hamilton, automotive director and head of electric vehicles at Deloitte, said that there have been signs of motor brands adapting to supply chain issues and managing to reduce waiting times on new cars.
‘Lead times are less of an issue this month for private sales as many dealers have been able to rely on stock ordered last year, ‘he said.
Richard Peberdy, UK head of automotive at KPMG, also provided an optimistic outlook, saying car sales demand has ‘remained relatively robust so far this year’ despite very limited supply.
‘Spending intention also remains, with a fifth of consumers planning on spending savings in 2022 telling KPMG that they will use them to buy a car,’ he added.
Nissan’s British-built Qashqai was the nation’s most-bought new car in April with just over 3,800 examples registered last month
The Qashqai has moved up to the third best-selling car of 2022 so far (list on the right), some 1,464 units behind the most popular new model, the Vauxhall Corsa
Diesel sales cut almost in half in a year; EVs up 41%
The British-built Nissan Qashqai was the most-bought new car in April.
Some 3,804 examples of Nissan’s compact SUV – which is produced at the Japanese brand’s Sunderland factory – were registered last month, ahead of the Ford Puma and Mini hatchback.
The Vauxhall Corsa was the fourth best seller and extends its lead at the top of the 2022 sales charts.
Diesel sales – both conventional and mild hybrid (MHEV diesel) – were down 46% year-on-year. Petrol registrations also declined by 16.5% while battery electric vehicle sales were almost 41% higher
Of all the different fuel types, diesel suffered the biggest decline in sales in April, down almost half on the same month a year ago.
A total of 12,645 diesel cars were registered last month, compared to 23,347 in April 2021 – a decline of 46 per cent.
Petrol registrations slipped by 16.5 per cent with 73,223 examples bought last month – though it continues to be, by far, the most popular fuel type, accounting for more than three in five new cars sold.
Registrations of pure electric cars continued to buck the overall trend, with a 41 per cent year-on-year increase in sales as 12,899 EVs entered the road last month, representing more than one in ten (10.8 per cent) new cars in April.
The SMMT anticipates that plug-in cars such as pure electrics and plug-in hybrids will account for more than a quarter of the new car market by the end of 2022.
A Zero Emission Vehicle mandate is set to be introduced in the UK from 2024. It will put in place binding targets for increasing electric car sales each year over the following decade
Ben Nelmes, co-founder and head of policy at green motoring consultancy New AutoMotive, said the ‘steady growth’ in electric cars is welcome but the Government needs to ‘go faster’ to encourage more people to make the switch from petrol and diesel cars.
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 called on ministers to introduce this at an ‘ambitious California-style’ level.
Projection for year-on-year ZEV mandate targets
2024: 22% new car sales electric
The US state has been implementing a ZEV mandate since 1990, with the percentage reaching 22 per cent in 2025.
The Department for Transport last month published a technical consultation paper on the policy design for the mandate, giving an initial look at how legally binding annual targets for car manufacturers could look in the run up to 2030.
It outlines that more than one in five (22 per cent) of all cars sold in Britain in 2024 should be zero-emission electric models – which is a year earlier than California.
By 2028, this share should rise to more than half (52 per cent) and by 2030 – the date marked for the ban on sales of new internal-combustion-engine-only petrols and diesels – some 80 per cent of registrations need to be electric.
By 2035 – the date when new hybrids are also banished from showrooms – all models sold in Britain should be electric, under the mandate proposal.
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