UK new car sales in 2022 downgraded as April data shows slump continues

New car sales fell 15.8% in April 2022 compared to April 2021, with the month ending at a total of 119,167 registrations.

SMMT data shows the April decline was mainly due to a -33.3% decline in large fleet registrations as many brands, unable to build enough cars to meet demand, continue to give the priority to the generally more profitable private consumer segment, which has helped this market segment. see a modest increase of 4.8%.

Small business registration volumes held up better, increasing by 15.4%.

Blaming the continued impact of supply chain constraints and broader macroeconomic factors such as rising inflation and global political uncertainties, the usual revision of the SMMT in April led to a downward revision of its market outlook for the full year 2022.

This followed the worst March plate change market since 1998.

It now expects 1.72 million new cars to be registered in 2022, up from 1.89 million forecast in January.

This will still represent an increase of 4.5% compared to the total for 2021.

And the SMMT expects a quarter of all new cars sold this year to be plug-in vehicles: either pure battery electric vehicles (BEVs) or plug-in hybrids (PHEVs). These have accounted for just over one in five new cars registered since the start of the year, so an increase is expected as more new plug-in cars are launched.

“Global semiconductor shortages continue to drag the market down, with global geopolitical issues threatening to undermine both supply and demand in the months ahead,” SMMT chief executive Mike Hawes said.

“Manufacturers are doing everything they can to deliver the latest low- and zero-emission vehicles, and those considering buying should look to place their orders now to benefit from incentives, low interest rates and lower costs. reduced operating hours.”

Hawes said that accelerating the transformation of the new car market and the carbon savings demanded of road transport in these difficult times requires not only the resolution of supply problems, but a wider set of measures that encourage demand. clients and tackle obstacles, the biggest of which remains load anxiety.

The SMMT wants any regulation aimed at increasing sales of electric vehicles to be accompanied by proportionate and binding targets for the provision of charging infrastructure.

In April, there were 12,899 BEV registrations, an increase of 40.9% compared to the same month last year.

In response to the April data, Ian Plummer, director of Auto Trader, said that many of the sales reflected in the April figures would have been done months ago and that the main obstacle to stronger growth remains supply, not demand.

“Despite a worsening cost of living crisis, consumer demand for new cars remains robust, with some automakers reporting several months of declining orders. ‘potential new car buyers are up around 10% from very high figures in April last year, a period that saw huge pent-up demand released at the end of the UK’s third Covid lockdown’ , he added.

There is little prospect of a full recovery of new vehicle production to pre-pandemic levels in the near term.

“Supply chain issues and component shortages plaguing the auto industry are now expected to last into the first half of 2023 as conflict in Ukraine exacerbates post-pandemic disruption for automakers,” Plummer added.

NFDA chief executive Sue Robinson added, “Demand is being held back by cost of living pressures. The state of the NFDA market research reveals that the rising cost of living is the most concerning factor for franchise dealers, followed by ongoing supply constraints.

“Buying a new vehicle tends to be the second most important purchase in a consumer’s life, after their home. Therefore, franchise dealerships are working extremely hard with the customer to ensure quality service and customer care at a time when inflationary pressures are beginning to impact decision-making.

“It should also be noted that sales of electrified vehicles continue to perform very well as brands introduce new models. Franchise dealers who have Electric Vehicle Approved (EVA) accreditation are extremely well placed to advise customers on the best new vehicle for them.”

Richard Peberdy, UK head of autos at KPMG, said amid weakening consumer spending power and rising fuel and energy costs, demand for car sales remained relatively robust so far this year, compared to a very limited supply.

“Spending intention also remains, with a fifth of consumers planning to save money in 2022 telling KPMG they will use it to buy a car,” he added.