The UK new car market recorded its weakest September since 1998, despite battery electric vehicles (BEVs) recording their best ever month.
This is according to the latest statistics from the Society of Motor Manufacturers and Traders (SMMT), which found that 215,312 cars were registered during the month – a 34.4% decline on September 2020, when pandemic restrictions were curtailing activity.
September is typically the second busiest month of the year for the industry, but the SMMT noted that with the ongoing shortage of semiconductors impacting vehicle availability, the 2021 performance was down some 44.7% on the pre-pandemic ten-year average.
BEVs, however, did enjoy their best ever month, taking a market share of 15.2% with 32,721 vehicles being registered. The September performance was just over 5,000 shy of the total number registered during the whole of 2019.
Plug-in hybrid (PHEV) share also grew to 6.4%, meaning more than one in five new cars registered in September was zero-emission capable. Meanwhile, hybrid electric vehicles (HEVs) grew their overall market share from 8% in 2020 to 11.6%, with 24,961 registered in the month.
Looking at market segmentation, private demand was down 25.3% with 120,560 new registrations in the month, but a bigger fall was recorded in large fleets, which declined by 43.1% to 90,445 units. As a result of the month’s disappointing performance, registrations year to date are now only 5.9% ahead of 2020 figures, and 29.4% down on the pre-pandemic decade-long average.
Mike Hawes, SMMT chief executive, said, “This is a desperately disappointing September and further evidence of the ongoing impact of the Covid pandemic on the sector. Despite strong demand for new vehicles over the summer, three successive months have been hit by stalled supply due to reduced semiconductor availability, especially from Asia. Nevertheless, manufacturers are taking every measure possible to maintain deliveries and customers can expect attractive offers on a range of new vehicles.
“Despite these challenges, the rocketing uptake of plug-in vehicles, especially battery electric cars, demonstrates the increasing demand for these new technologies. However, to meet our collective decarbonisation ambitions, we need to ensure all drivers can make the switch – not just those with private driveways – requiring a massive investment in public recharging infrastructure. Chargepoint roll-out must keep pace with the acceleration in plug-in vehicle registrations.”
Sue Robinson, chief executive of the NFDA, said: “Whilst September is an important month for the sector and the decline is disappointing, albeit expected, retailers continue to experience robust consumer demand with a strong used car market and increasing appetite for EVs, partly driven by the fuel issues at the end of the month.
“As we enter the final quarter of the year, we will monitor the impact that supply constraints have on the market, with retailers continuing to play a central role in helping their customers to find the vehicle that best suits them.”
Seán Kemple, managing director of Close Brothers Motor Finance, said: “Consumer demand is there, but choice is stifled. Buyers are turning to ‘nearly new’ options, a growing trend where vehicles up to 12 month old are outstripping the price of their new counterparts. This is something we’ve never seen before in the car market and will likely never see again. The supply chain pressures are unlikely to ease up this side of Christmas and with second-hand vehicles going for premium prices, customers looking for a car are left in an unenviable position.
“Realistically, it could be March next year before we see any real recovery. In the meantime, dealers need to reassess their forecourt strategies in these unprecedented circumstances, ensuring that they can satisfy the high levels of consumer demand and offer buyers more choice for their next purchase.”
Karen Hilton, chief commercial officer at heycar, said: “Whilst the impact of semiconductor chip shortages continue to be felt by the industry, the fuel crisis has left the nation’s motorists facing misery of their own. Yet the scenes of panic-buying, punch-ups at the pumps and queues snaking for miles have had a galvanising effect on car-buyers – prompting an unprecedented surge in interest in EVs and hybrid vehicles.
“At the height of the fuel shortage, between 20-27 September leads for electric cars on heycar were up 159% year-on-year. Contrast that with the week the government announced the 2030 ban on new petrol and diesel cars and the increase is even more stark – up 192%.”
James Fairclough, chief executive of AA Cars, said: “One thing that is improving is sales of electric vehicles. BEVs accounted for 11% of all new car sales in August and 15% of sales in September. EVs and hybrids now account for well over a quarter of the cars made in UK factories, their highest ever level.
“For those already thinking of going electric, the sight of EV drivers breezing past long queues at service stations during September’s fuel crisis may have been a clincher.
“With demand outstripping the supply of new vehicles for sale, many motorists are choosing to focus on the second-hand market instead, where they can often get a nearly-new car for significantly less money than a new one. As a result the used car market is seeing a prolonged surge in interest.”