Data for new car registrations suggest that growth is stunted due to shortages.
There were c 123,000 cars registered in July, which represent the weakest performance since before the millennium. Because of supply chain shortages and the impact of the ‘pingdemic’, the annual outlook has now resulted in units being revised down to 1.82 million.
Electric, ‘plug in’ demand has experienced an uptake, however. In July, the figures demonstrated an upturn of 17.1%, resulting in 21,038 units being registered. This type of vehicle is now on target to exceed more than one in six new acquisitions in 2021. They account for some 9% of registrations, with plug in hybrid vehicle data figures closely following at 8%.
SMMT Image Depecting New Car Registrations.
New car registration data suggests that in July 2021 registrations declined by 29.5%, a figure of 123,296 units. This reduction was exaggerated in comparison to July 2020, when there was a substantial increase in registrations. This difference was caused by a full month of as dealers had just reopened, following the first lock down in 2020. Effectively giving them a full month of trading.
In July, all new car segments were in decline. The UK’s most popular type of vehicle remains the supermini, followed by the lower medium sector and dual purpose (32.9%, 28%, and 27.3 % respectively). The decline was limited to larger fleet operators. With 61,140 units sold, this represented 27.8% reduction over the recorded average within the past decade.
As one would expect, private registrations illustrated a lesser decline of -10.7% (59,841 units). Average recorded private registrations in July 2010-2019 were 67,046.
It was the weakest July prior to the introduction of the split plate system, which was introduced in 1998 (July 1998 registrations: 37,896).
The outlook for the UK economy is looking more positive, the bulk of economic indicators are suggesting that sentiment is weighted toward spending, this includes bigger ticket items. However the pandemic has given way to supply challenges and this will have the effect of restricting growth. Especially, given that August is traditionally a dry month for vehicle registrations. Quarter 4 should see growth tentatively return.
Revising forecasts down is a prudent measure. New car registration data is expected to reach c 1.82 million units in 2021. This represents an uplift of 11.7% on 2020, but it is shy of the forecasted 1.8 million predicted in April. It is also down -21.8% on new car market averages, recorded over the past decade (average annual registrations for 2010-2019: 2,330,307).
SMMT Image Showing New Car Registrations (July) 2005-2021
On a more positive note, given a continuation of momentum in the electric vehicle market – it is estimated that EV’s will account for 9.5% of vehicle registrations by the end of 2021. Plug in Hybrids are expected to make up 6.5% of the UK market. As a collective, a total of c290,000 upon completion of the year.
In conclusion, the sector continues to face challenges with staff levels, as well as semiconductor shortages.
This makes it difficult to demonstrate strength, and improve the outlook to indicate a full recovery. There may be more light at the end of the tunnel for staffing with changes to self isolation protocols, but the semiconductor issue doesn’t look like it will be solved in the immediate.
Back to New Car Registration Data Home
