June 2021 new car registrations down 16.4% on average pre-pandemic June as semiconductor crisis starts to bite

  • Total of 186,128 cars registered
  • Up 20 per cent on June 2020 but down 16.4 per cent on average pre-pandemic June – a more realistic comparison
  • Tesla Model 3 was June’s best-seller

Time 9:18 am, July 5, 2021

New car registrations were down 16.4 per cent last month compared to a pre-pandemic June, new data shows.

Figures published by the Society of Motor Manufacturers and Traders (SMMT) show that 186,128 cars were registered last month.

While that was 28 per cent up on June 2020, showrooms had only just reopened following lifting of the first national lockdown restrictions 12 months ago.

Consequently a more realistic comparison is with an average June pre-pandemic – a 10-year average shows registrations were down 16.4 per cent last month.

Moreover, registrations for June 2021 fell short of industry expectations by around 9,000 units partly because of the ongoing global semiconductor shortage acted as a limiting factor on supply.

As a result, overall registrations for the first half of the year are down 26.8 per cent.

Plug-in vehicles continued to increase market share.

Combined, battery electric (BEVs) and plug-in hybrid vehicles (PHEVs) accounted for 17.2 per cent of new vehicles hitting the road (31,981 units).

BEVs accounted for more than one in 10 registrations (10.7 per cent).

PHEV uptake, however, continued to grow faster than BEV uptake for the third month running, following reductions to the Plug-in Car Grant in March.

With the end of domestic restrictions later this month looking more likely, business and consumer optimism should improve further

Private registration numbers were positive but subdued compared to large fleets, reflecting an ongoing trend for the year with consumer uptake increasing 30.6% year on year, compared to 47.8% for fleets.

All vehicle sizes – bar executive and multi-purpose – saw growth in June, with the strongest growth seen in the mini segment, which had been relatively weak for several months.

Superminis were the most popular car class, accounting for 34.1 per cent of registrations, followed by lower medium (26.8 per cent) and dual purpose (24.5 per cent).

The Tesla Model 3 was June’s best-selling car followed by the Volkswagen Golf and Ford Puma.

The usual top-sellers of Corsa and Fiesta were adrift in fourth and fifth places, however the both lead the year-to-date charts with the Corsa in first with 24,399 and Fiesta following with 21,511.

SMMT chief Mike Hawes said: ‘With the final phases of the UK’s vaccine rollout well underway and confidence increasing, the automotive sector is now battling against a “long Covid” of vehicle supply challenges.

‘The semiconductor shortages arising from Covid-constrained output globally are affecting vehicle production, disrupting supply on certain models and restricting the automotive recovery.

‘However, rebuilding for the next decade is now well underway with investment in local battery production beginning and a raft of new electrified models in showrooms.

‘With the end of domestic restrictions later this month looking more likely, business and consumer optimism should improve further, fuelling increased spending, especially as the industry looks towards September and advanced orders for the next plate change.’

What the industry thinks

Industry on tenterhooks

The ongoing current semiconductor or microchip shortage is affecting both new vehicle supply and trim level choice, which in turn is seeing new car buyers switch to the used market.

The shortage has the potential to match and even surpass Covid-19 for its disruption and intensity, especially as manufacturers and suppliers have admitted there is no easy fix in sight – highlighting the weaknesses in even the most robust global supply chains.

With Covid cases also rising once more, the industry remains on tenterhooks. It has been very clear about the impact another lockdown would have, and in the run up to the September plate change it’s imperative showrooms remain open to help keep the industry moving forward and protect jobs and businesses.

Jim Holder, editorial director, What Car?

Potential for consolidation

Stronger sales are helping retailers beat some market expectations and support healthy dealer margins as new and used car inventories remain low.

The supply and demand imbalance has created the unusual situation of used cars rising in value, rather than depreciating. But recovering fleet sales will eventually replenish the used car market and clip inflation, following 18 months of stifled investment.

There’s potential for some consolidation between these top performing retailers and the growing bunch of international online players, who are hungry for the experience, infrastructure and used car supply that traditional dealers boast.

Richard Peberdy, UK head of automotive, KPMG UK

Full effect of chip shortage yet to come

Few will be unaware of the current supply and chip shortage challenges facing the new car sector. Given this context June’s new car sales results is a more than respectable performance, which has been helped by manufacturers focusing on supporting retail over less profitable channels.

It is worth bearing in mind that the performance we’re seeing now [on Auto Trader] is based on a significant number of orders which were taken before the semi-conductor shortage came into effect. It’s likely therefore that the full impact will be more evident over the months to come.

Ian Plummer, commercial director, Auto Trader

July sales could accelerate

New car sales continue to gain momentum, increasing month on month, and with lockdown restrictions set to ease further this month, July could see sales accelerate once again as drivers gear up for summer holidays in the UK and trips to see friends and family.

The economy is bouncing back well, and a growing sense of progress is building consumer confidence. As a result, more Britons are more willing to make big ticket purchases – like cars – that they had been holding off on until now.

James Fairclough, CEO, AA Cars

What’s next?

Planning for a return to the office post-lockdown means shirts and shoes are high on the shopping list for many of us – but for some it also means a brand new set of wheels.

The closure of non-essential retail during the pandemic created plenty of pent-up demand in the UK vehicle market, which has boosted sales in recent months.

However, whilst the latest year-on-year growth figures remain positive, industry figures will be preparing themselves for the eventual end of this post-lockdown sales boost.

The SMMT predicted around two million vehicle sales in 2021, but as we reach the six-month point with just over 900,000 cars sold a key question being asked on the nation’s forecourts will be “what’s next for driving sector growth?”.

Karen Johnson, head of retail & wholesale, Barclays Corporate Banking

EV growth shows no signs of slowing down

Momentum is beginning to build along the road to recovery from the pandemic, but today’s half-year figures still represent a 28 per cent drop on pre-Covid levels, indicating that the car industry isn’t out of the woods just yet.

Despite this, it’s encouraging to see the growth in EVs continue to show no signs of slowing down, with registrations up 138 per cent on this time last year.

We’ll no doubt see the impact of vehicle supply issues and semi-conductor shortages unfold in the coming months, but if we’re serious about leading the EV charge then sustained investment from policymakers to accelerate the UK’s electrification plans has to stay at the top of the agenda.

Meryem Brassington, electrification propositions lead, Lex Autolease

James Batchelor's avatar

James – or Batch as he’s known – started at Car Dealer in 2010, first as the work experience boy, eventually becoming editor in 2013. He worked for Auto Express as editor-at-large and was the face of Carbuyer’s YouTube reviews. In 2020, he went freelance and now writes for a number of national titles and contributes regularly to Car Dealer. In October 2021 he became Car Dealer's associate editor.

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