UK new car sales down 24.3% in June

New car registrations in the UK fell 24.3% in June, according to the latest figures released today by the Society of Motor Manufacturers and Traders (SMMT). The month saw 140,958 new vehicles registered, the weakest June performance since 1996.

The declines were largest in large fleets, which saw registrations drop -27.6%, while private volumes fell -21.7%, more modestly. As a result, the fleet and corporate market share has been reduced to 50.7% as manufacturers prioritize private consumers in a tight supply environment.

With continued shortages of key components, exacerbated by pandemic restrictions in China, global vehicle production has struggled to keep up with demand throughout 2022. New car registrations for the year to date have fell 11.9% to 802,079 units – the weakest first half performance since 1992, bar 2020.1 Some 107,894 fewer new cars were registered in the first half of 2022 compared to the same period last year – despite 2021 demand restricted by dealership lockdowns through April, with consumers only able to purchase vehicles through click and collect.

Battery electric vehicles (BEVs), however, continued to grow, growing 14.6% in volume as market share continued to grow, reaching 16.1% from 10.7% a year earlier. Conversely, the adoption of plug-in hybrid electric vehicles (PHEV) fell by 4,425 units to take a market share of 5.5%. In total, plug-in vehicles accounted for more than a fifth (21.6%) of new cars put into circulation during the month. All other powertrains saw their registration volumes and market shares decline, with the exception of hybrid electric vehicles (HEVs) which, despite a drop of 1,172 units, increased their market share to 10.6 %.

While growth rates were expected to moderate as the market begins to settle, the slowdown is greater than expected, leaving the market behind the industry outlook. Part of this drop is attributable to ongoing supply chain shortages which are hampering production of all models, but the removal of the subsidy for plug-in cars means the UK is now the only major European market without incentives for purchase for private EV buyers.

Mike Hawes, Managing Director of SMMT, said: “The semiconductor shortage is stifling the new car market even more than last year’s lockdown. Demand for electric vehicles continues to be the only bright spot as more electric cars hit the road than ever before, but while this growth is welcome, it is still not enough to offset weak overall volumes, which which has huge implications for fleet renewal and our ability to meet global carbon reduction targets. However, with motorists facing rising fuel costs, switching to an electric car is increasingly logical and the industry is working hard to improve the supply and prioritize deliveries of these new technologies given the savings they can allow drivers.