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NEW car sales continued to fall in April, largely driven by supply side constraints and  continued lockdowns in China which have impacted the availability of new vehicles and causing the SMMT to revise its market outlook for 2022, with 1.72 million new cars now expected to be registered this year, down from previously forecast 1.89 million

In April, a total of 119,167 new cars were registered, a decrease of 15.8% from the same period last year. Sales to private buyers grew by 17.8%; fleet registrations were down by -25%.

Battery electric vehicles (BEVs) saw significant growth, up 40.9% to 12,899 units. Plug-in hybrid (PHEVs) registrations declined by -36.6% to 6,449 units, whilst hybrids (HEVs) grew 18.3% to 13,951 units. There are now 175,337 registered EVs on the road in 2022 compared to the 120,541 at the same point last year, a 45.5% increase.

With sales of electric growing, diesel fell from 14,012 units to 6,725 (-52%), and petrol has fallen from 71,173 units to 54,633 (-23.2%).

NFDA Chief Executive Sue Robinson added: “Demand is being dampened by the cost of living pressures. NFDA’s state of the market survey* reveals cost of living increases are the most concerning factor for franchised dealers, followed by the ongoing supply constraints.

“Buying a new vehicle tends to be the second largest purchase in the life of a consumer, after their house. Therefore, franchised dealers are working extremely hard with the customer to ensure quality of service and customer care at a time when inflationary pressures are beginning to impact decision making.

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

April’s decline was driven primarily by a 33.3% decrease in large fleet registrations, with manufacturers continuing to prioritise private consumers given robust demand, which helped this market segment see a modest increase of 4.8%. Smaller business registration volumes fared better, growing by 15.4%.

The SMMT said the sector faces further economic headwinds, with rising inflation, not least due to the spiralling energy and fuel costs squeezing household incomes, and further supply chain and other uncertainties arising from the global political situation and the effects of the Russian invasion of Ukraine.

More positively, however, drivers able to invest in a new vehicle can still reap benefits, as interest rates remain historically low, grants for BEVs will be in place until at least early 2023, and running costs associated with new electric cars are generally lower than those of petrol or diesel.

Mike Hawes, SMMT Chief Executive, said: “The worldwide semiconductor shortage continues to drag down the market, with global geopolitical issues threatening to undermine both supply and demand in the coming months. Manufacturers are doing everything they can to deliver the latest low and zero emission vehicles, and those considering purchase should look to place their orders now to benefit from incentives, low interest rates and reduced running costs.

“Accelerating the transformation of the new car market and the carbon savings demanded of road transport in such difficult times requires not just the resolution of supply issues, however, but a broader package of measures that encourages customer demand and addresses obstacles, the biggest of which remains charging anxiety.”

Jon Lawes, Managing Director, at Novuna Vehicle Solutions pointed out that it has taken just four months for the UK to register over 75,000 new fully battery powered vehicles in 2022, a milestone that in 2021 wasn’t reached until July, while in 2020 it was as late as October, a full six months later than this year.

He added: “The impressive numbers illustrate how EV manufacturers are, for now at least, largely belying the vehicle shortages which are having a profound impact on the rest of the automotive industry.

“Supply chain issues are causing OEMs to feel the pinch more than ever as they struggle to fulfil increasing orders, on top of a backlog of deliveries. With a protracted shortage of vehicles, it is prudent for drivers and fleet operators to be planning further ahead, increasing their renewal cycle from 6 to 9 months in advance. For leasing companies, there is an onus on providing flexible extension agreements to help alleviate the current situation.”

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