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New car market declines again for worst June since 1996

Date: 05 July 2022   |   Author: Sean Keywood

UK new car registrations were down by 24.3% year-on-year in June, with fleet sales also continuing to lag behind the retail market.

According to data from the Society of Motor Manufacturers and Traders (SMMT), the total of 140,958 new cars registered last month represented the market's worst performance in June since 1996, which the organisation attributed to continuing global vehicle supply problems amid persistent component shortages, and also Covid-19 restrictions in China.

Fleet registrations were down by 27.6% in June, compared with a 21.7% decline in private sales, with the SMMT acknowledging manufacturers were prioritising retail amid the current supply constraints - although the gap between the two sales channels was far closer than that seen in May.

Business registrations, classed as those to organisations with fewer than 25 vehicles, were down by 5.3%, taking 3% of the overall market, compared with 49.3% for private sales and 47.7% for fleets.

In terms of fuel mix, battery EV registrations were up by 14.6% year-on-year in June, taking a 16.1% market share, and making it the only category to see an increase in June.

Plug-in hybrids were down by 36.5% for a 5.5% market share, and conventional hybrids were down by 7.3% for a 10.6% market share. 

Mild hybrid petrol registrations fell by 26.1% for a 13.2% market share, while mild hybrid diesels were down by 39.2%, accounting for 4.9% of the market.

Petrol car sales were down by 28.2% for a 44% market share, while diesels were down by 46.7% to take just 5.7% of the market.

Although EV sales continue to rise, the SMMT has noted that the pace of growth of plug-in vehicle sales appears to be slowing, with registrations up by 26% in the first half of this year, compared with 161.3% in the first half of 2021. Alongside the wider car industry supply problems, the SMMT also named the UK Government's scrapping of the plug-in car grant as a factor in this - although that was only implemented in the middle of last month.

SMMT chief executive Mike Hawes said: "The semiconductor shortage is stifling the new car market even more than last year's lockdown. 

"Electric vehicle demand continues to be the one bright spot, as more electric cars than ever take to the road, but while this growth is welcome it is not yet enough to offset weak overall volumes, which has huge implications for fleet renewal and our ability to meet overall carbon reduction targets. 

"With motorists facing rising fuel costs, however, the switch to an electric car makes ever more sense and the industry is working hard to improve supply and prioritise deliveries of these new technologies given the savings they can afford drivers."