Worst UK July car sales in decades as manufacturers struggle to get parts

·2-min read
Cars in a lot
Car sales stalled in July, held up by shortages of parts. Photo: David Zalubowski/AP

July saw the lowest number of new car sales in the UK in decades as supply chain shortages and the "pingdemic" held up demand.

According to the Society of Motor Manufacturers and Traders, there were 123,296 new cars registered in July, a 29.5% decrease on the same month last year. 

The SMMT said the decline was artificially heightened by comparison with the same month last year, when registrations rose dramatically as showrooms enjoyed a full month’s operation following the first 2020 lockdown.

However, the July performance was down 22.3% on the average recorded over the past decade, as the ongoing semiconductor shortage and the "pingdemic" impacted on both supply and demand.

As a result, this was the weakest July for new car registrations since 1982, prior to the introduction of the two-plate system.

"The next few weeks will see changes to self-isolation policies which will hopefully help those companies across the industry dealing with staff absences, but the semiconductor shortage is likely to remain an issue until at least the rest of the year," said SMMT CEO Mike Hawes.

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The industry revised its annual outlook down to 1.82 million units.

The decline was predominantly within large fleets which, at 61,140 units, was some 28.7% lower than the average recorded over the past decade. 

Private registrations declined by a lesser extent, down 10.7%, to 59,841 units.

"It would be easy to misinterpret these results as a drop in consumer demand for new cars, but our data shows that that couldn’t be further from the truth. In fact, 1.4 million people viewed a new car on Auto Trader in July, which is up 6% compared to last year’s post-lockdown July sales burst and more than double 2019 levels," said Ian Plummer, commercial director at Auto Trader.

"With such strong demand, we’re clearly in the grips of a 'seller’s market' at the moment, although the potential lost sales make the supply constraints all the more frustrating for car brands and retailers alike while they’re unable to reap all the benefits of this bounce back."

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The bumper growth in plug-in vehicles continued, with battery electric vehicles accounting for 9.0% of registrations, while plug-in hybrids reached 8.0%. 

All new car segments experienced declines, but Britain’s most popular types of cars remained superminis (32.9% of registrations), lower medium (28.0%) and dual purpose (27.3%), the SMMT said.

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