The number of new cars registered in 2021 rose by just one per cent despite a surge in EVs, new figures show.
Full-year registrations data published today (Jan 6) by the Society of Motor Manufacturers and Traders (SMMT) show 1.65m cars were registered last year, with the market down 28.7 per cent on pre-pandemic 2019.
In December, 108,596 cars were registered – down 18.2 per cent on December 2020.
The full-year figure is a one per cent rise from 2020’s 1.63m total, which itself was the worst 12-month performance since 1992.
This is a ‘bleak picture’ and ‘not what we’d hoped for’, SMMT chief executive Mike Hawes said.
The global shortage of semiconductors and the impact of the pandemic were blamed for the sector not mounting a stronger recovery from 2020.
Hawes said: ‘The first half of the year was in lockdown and, despite online click and collect, and the industry really stepping up to deliver that, it was still a tough start to the year.’
He said things ‘didn’t improve significantly’ in the latter six months ‘because of shortages in terms of supply.’
‘We think demand is still there,’ he said.
‘Demand is still strong.
‘The challenge is, how do you maximise your ability to supply customers when the supply of vehicles is so heavily challenged coming out of factories?’
The Vauxhall Corsa took the gong of best-selling car of 2021, but more surprisingly the Tesla Model 3 snatched second place.
The American pure-electric saloon also took the title of December’s best-selling car, followed by the Mini and Vauxhall Corsa.
Hawes described the increased popularity of electric cars as ‘the one very strong and bright spot on the horizon’.
The SMMT data shows 2021 was the best year on record for plug-in cars, both battery electrics and plug-in hybrids, with 305,000 registered, accounting for around one in six of all new cars bought.
More battery electric vehicles were registered last year than between 2016 and 2020 combined.
But Hawes stressed the importance of ‘continued investment’ in electric vehicles, saying it ‘doesn’t help’ when cuts are made to government grants.
The latest reduction, in mid-December, saw the maximum amount of cash motorists can claim towards a plug-in car fall £1,000 to £1,500.
The Department for Transport said the move would let the scheme ‘help more people’.
What the industry says
Strong EV sales is the only good news
The strong electric vehicle sales performance was one of the few success stories for the automotive sector in 2021. Their rising popularity and rapid uptake is one trend that we can guarantee to see continue in 2022.
But that’s as far as the good news goes. The semiconductor shortage remains a massive problem for almost all manufacturers, with delivery times pushed to beyond a year for many models.
With new Brexit-related customs controls, rising price levels and growing Covid cases, the start of 2022 is set to continue to test the sector to its limits. The government needs to take the automotive industry into account when planning further economic stimulus packages.
Jim Holder, editorial director, What Car?
2022 set to be year of electric
The future has never felt more electric. On the back of the SMMT revealing that more EVs were sold in the past 12 months than over the previous five years combined, EVs are clearly taking over.
We expect to see new EV sales growth accelerate in 2022 as manufacturers expand their electric car ranges and more car owners have the confidence to switch to electric.
With more EVs at all price levels set to hit the market, alongside a more widespread charging infrastructure to support the government’s green agenda as we draw near to the 2030 deadline banning sales of diesel and petrol vehicles, 2022 is set to be the year of electric.
Alex Buttle, co-founder, Motorway
Exciting year ahead despite shortages
Whilst supply shortages will frustrate both the automotive industry and consumers, 2022 is due to be an exciting year for both.
A variety of new models will hit the market, and electric vehicle sales will further accelerate. The industry will focus on how to reduce charging times, and national and local government must focus on ensuring public charging infrastructure keeps pace.
Carmakers will also be racing to develop other zero emission solutions, including hydrogen and synthetic fuels.
Despite the challenges presented by the pandemic, supply issues, and rising costs, the innovation opportunities of this age are why global automotive executives tell us that overall they are optimistic about the future of car making.
Richard Peberdy, UK head of automotive, KPMG
Not all doom and gloom
This time last year, the SMMT predicted the industry would bounce back from the disappointment of 2020 and would see around two million new registrations in 2021.
Unfortunately this hasn’t materialised. Many across the industry are now wondering when registrations will get back to the levels seen pre-Covid.
However it isn’t all doom and gloom. Electric sales have been a clear positive to emerge from the last year, and the growth of this sector will be key to driving recovery.
Dealers will be adapting their forecourt operations to match this (and every other) aspect of the UK motor industry, and are well positioned to adapt and succeed as we move into 2022.
Karen Johnson, head of retail & wholesale at Barclays Corporate Banking
Leaner and fitter industry
Traditional set-piece events like the new plate change were conspicuous by their absence and will be so again this March.
It means in many ways 2021 for dealers can be epitomised by a return to back-to-basics retailing. The result is real structural change in a sector that goes into 2022 leaner and fitter than it has been for a number of years.
And the outlook remains positive – with demand surging 42 per cent the week after Christmas and remaining strong into 2022 as car-buyers follow the time-honoured tradition of looking to start the year with a new set of wheels.
The impact of Omicron, of course, remains to be seen.
Karen Hilton, chief commercial officer, Heycar