New Car Registrations in the UK Increase as the Automotive Industry Starts to Recover
The automotive industry has suffered greatly during the pandemic; with showrooms being forced to close as per Government requirements and social distancing measures, worsened by the global semiconductor shortage, new cars have been scarce. Despite the semiconductor shortage still ongoing and continuing to play havoc with the lead times of new cars, January 2022 revealed a slight glimmer of hope as new car registrations were up 27.5%.
January 2022 saw 115,087 new cars registered. This is an increase of 24,838 when compared to January 2021, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). 2021 was an extremely challenging year for car dealerships as the UK flittered in and out of lockdowns and requirements for the dealerships to close. While at an initial glance, this increase in new car registrations is promising, this figures are still down 22.9% when compared to January 2020/pre-pandemic.
Private vehicles taking priority over fleet?
There has been much speculation over whether manufacturers are prioritising the build and supply of cars for the private individual over those of a fleet customer.
The latest figures released by SMMT indicated that the majority of the growth in new registrations came from private buyers as oppose to fleet. The SMMT have put this down to the private individual being prioritised due to manufacturers struggling to with demand and reduced capacity in the factories. It is important to remember that the majority of the cars on UK roads are imported from overseas, largely from Europe. Whilst the UK economy has seen a relatively quick recovery and lockdown restrictions eased, the story in Europe was very different. Factories may still have been forced to close as per their country's legal requirements, and staff shortages from Covid continue to be a prominent issue.
With 62,300 cars being registered to private individuals saw only a marginal decline of 5.6% on pre-pandemic levels.
Until the recent global shortage, the number of semiconductors a car actually has has been taken for granted. With the average car needing at least 1,400 semiconductors, it is understandable that manufacturers had to implement some form of prioritisation plan. Certain manufacturers even halted the production of certain models due to those models requiring a higher number of semiconductors.
Continue growth for the EV market
The number of people making the switch to electric and hybrid vehicles has continued to grow as we become more aware of the impact our vehicles have the environment; the fuel crisis seen in late 2021 and the rising cost of living.
According to the SMMT, almost one third of all the new cars that were registered in January 2022 were electric or hybrid vehicles. A staggering 14,433 of the vehicles were pure-electric and 9,047 were Plug-In Hybrid (PHEV).
SMMT continued by saying that there are 50 more EV vehicles set to hit the market this year, in addition to the 140 different options already available. Whilst some drivers are being held back from switching to EV due to the "perception of lack of charging infrastructure" and 'range anxiety', the SMMT predicts that by the end of 2022, EVs will make up 25% of the market share of new car registrations.
A full recovery?
It is very difficult to say when the automotive industry will fully recover to pre-pandemic levels; there are many factors to be considered when trying to estimate the timescale for a full recovery. Of course, much of it will depend on the global recovery from Covid-19 but also the rate of production for semiconductors. Add to that the clearing of the backlog of orders pending semiconductors. Nevertheless, the news of a increase in new registrations is a promising sign. With the SMMT estimating the recovery "to continue into 2023", we will all just have to keep a close eye on the situation.