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Big drop in fleet sales drives new car market decline
Date: 04 November 2021 | Author: Sean Keywood
The UK new car market was down for the fourth month in a row in October, chiefly driven by plummeting sales to fleets.
The latest figures from the Society of Motor Manufacturers and Traders (SMMT) show that fleet registrations were down by 40.4% compared with October 2020, while business registrations, classed as to firms with fewer than 25 vehicles, were down by 45.5%.
In contrast, private registrations were down by only 3.3% (although these were strongly affected by the Covid-19 pandemic in October 2020), meaning the overall market saw a 24.6% fall, which was at least an improvement on the 34.4% year-on-year fall seen in September, when private registrations fell by 25.3% and the fleet and business declines were fairly similar.
However, last month's figures were still the worst seen in the month of October since 1991.
The SMMT attributed the overall sales decline to the continuing semiconductor supply crisis hitting new car production, and also to a worsening outlook for the wider economy.
For these reasons, it has now lowered its annual sales forecast for the year by 8.8% to 1.66 million cars, which would represent 30,000 more then in pandemic-hit 2020, but 650,000 fewer than in 2019.
The SMMT is, however, predicting a partial recovery, to 1.96 million registrations, in 2022.
October did see continuing strong demand for battery EVs, which saw registrations increase by 73.1% year-on-year to take a 15.2% share of the overall market.
Plug-in hybrid sales were also up, by 7.5%, for a 7.9% market share.
Every other fuel type saw declines, with diesel car registrations down by 66.4% for just a 6.6% market share, mild hybrid diesels down by 26.5% (4.2% market share), petrols down by 30% (45.5% market share), mild hybrid petrols down by 17.8% (12.4% market share), and conventional hybrids down by 21.5% (8.1% market share).
Commenting on the overall figures for October, SMMT chief executive Mike Hawes said: "The current performance reflects the challenging supply constraints, with the industry battling against semiconductor shortages and increasingly strong economic headwinds as inflation rises, taxes increase and consumer confidence has weakened.
"Electrified vehicles, however, continue to buck the trend, with almost one in six new cars registered this year capable of zero-emission motoring, growth that is fundamental to the UK's ability to hit its net zero targets.
"With next year looking brighter, and even more new models expected, the continuation of this transition will depend on the preservation of incentives that overcome the affordability barrier, and the ability of the public and private sectors to increase public on street charging to allay EV driver concerns."
