LAST year proved to be a roller coaster for new car registrations with lockdowns affecting demand at the start and the global shipping crisis and semiconductor shortage impacting supply towards the end of the year.
The result was an overall market down 28.7% from pre-pandemic levels according to figures released by the SMMT. The figures showed 2021’s new car registrations were 1.0% above 2020’s sales but remained below pre-pandemic levels by 28.7%; a total of 1.65 million units were registered.
Encouraging signs came from the electric vehicle market: 190,727 battery electric vehicles (BEVs) were registered in 2021, alongside 114,554 plug-in hybrid vehicles (PHEVs), accounting for 18.5% of new car registrations in 2021. In December, the market was -18.2% lower than the same month in 2020, but sales of BEVs grew by 26.4%.
Positively, demand from private buyers was up 19.9% in December compared to the same time in 2020, and in 2021 it was 7.4% higher than in the previous year.
Sue Robinson, Chief Executive of the National Franchised Dealers Association (NFDA), said: “Despite the recent challenges, there is cause for optimism. A poll conducted by NFDA revealed that 78.6% of franchised vehicle dealers are optimistic about the level of demand in the year ahead as consumer confidence improves while we move through the pandemic and the electrification of the UK car parc continues apace.
“It is encouraging that sales of electric vehicles experienced significant growth in 2021, driven by the growing range of models available and retailers’ efforts to help their customers make informed choices. However, it is important that the transition to zero emissions continues to be supported by investments in the charging infrastructure and financial incentives for EV buyers. As a result, the recent cut to the plug-in grant was disappointing.
“Throughout 2022, we are confident retailers will continue to show their resilience and ability to meet buyers’ demand with growing footfall levels in showrooms and an ever-improving online offering from dealers”.
The UK finished 2021 as the third largest European market for new car registrations but the second largest by volume for plug-in vehicles and the second largest for BEVs. It is only in ninth position overall, however, in Europe for BEVs by market share, underlining the progress still to be made, despite the UK having among the most ambitious targets of all major markets with the end of sale of new petrol and diesel cars scheduled for 2030.
Recent announcements, including cuts to both purchase incentives and grants for home chargers, put the achievement of industry’s and government’s net zero ambitions at risk. Furthermore, the slow pace of growth in on-street public charging – where, on average, 16 cars potentially share one standard on-street charger – could put the brake on EV demand and undermine the UK’s attractiveness as a place to sell electric cars.4
Mike Hawes, SMMT Chief Executive, said that manufacturers had to battle myriad challenges during the year with tougher trading arrangements, accelerating technology shifts as well as ongoing supply issues.
He added: “Despite the challenges, the undeniable bright spot is the growth in electric car uptake. A record-breaking year for the cleanest, greenest vehicles is testament to the investment made by the industry over the past decade and the inherent attractiveness of the technology.
“The models are there, with two of every five new car models now able to be plugged in, drivers have the widest choice ever and industry is working hard to overcome Covid-related supply constraints.
SMMT
“The biggest obstacle to our shared net zero ambitions is not product availability, however, but cost and charging infrastructure. Recent cuts to incentives and home charging grants should be reversed and we need to boost the roll out of public on-street charging with mandated targets, providing every driver, wherever they live, with the assurance they can charge where they want and when they want.
Lucy Simpson, head of EV propositions at Centrica, said last year the UK had taken a “seismic step” towards achieving its electric vehicle ambition. She added: “To ensure all drivers can make the switch to electric, rapidly expanding the UK’s charging network has to remain at the top of the industry’s New Year’s resolution list. Government investment outlined in the Net Zero strategy is a positive step, but we must see further commitments to keep up with the demand from motorists.
“What’s more, 2022 must be the year we seriously discuss the growth of at-home charging. While inroads have been made to install chargepoints at work and leisure destinations, the roll out of chargers closer to driver’s homes will unlock the potential for many more EVs being adopted.”
James Fairclough, Chief Executive of AA Cars, said that after recovering slightly in November, new car sales ended 2021 on the back foot as dealers endured a chronic shortage of vehicles to sell.
He added: “Forecourts remain busy, but there’s no escaping the fact that insufficient supply of new vehicles is limiting the number of sales dealers can make.
“Customers placing an order often face a wait time of several weeks to get their vehicle. In some cases, dealers don’t even have enough stock to be able to offer prospective buyers a test drive.
“Separate data from the SMMT shows that the number of new vehicles rolling off UK production lines has fallen for five months in a row. In November it was 28.7% down on the same time in 2020, its worst November performance for three and half decades.
“With car factories in other countries similarly hit by the global shortage of semiconductors, the supply of new vehicles for sale may not catch up with buyer demand for several months to come.
“That’s why thousands of would-be new car buyers are focusing on the second-hand market instead, where availability is significantly better. On the AA Cars website we’ve seen a surge of interest in used vehicles that are available to drive away today.
“While used car prices have risen over the past year, there are still some highly competitive deals to be had. However we always recommend that an independent pre-sale vehicle inspection takes place on any second-hand car before any money changes hands, to ensure drivers can have peace of mind that there are no hidden faults which could cost them money down the line.”
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