New car industry records weakest July performance since 1998

July saw 123,296 new cars registered during the month – the weakest July performance since before the millennium.

Hampered by an ongoing shortage of semiconductors and the effect of the ‘pingdemic’, July’s performance was down 22.3 per cent on the average recorded over the past decade, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT). It also represented a drop of 29.5 per cent on the same month last year.

The decline was seen largely within large fleets which, at 61,140 units, was 28.7 per cent lower than the average recorded over the past decade. Private registrations saw a lesser decline, falling 10.7 per cent to 59,841 units.

However, the growth in plug-in vehicle registrations continued. The battery-electric segment of the market accounted for nine per cent of registrations while plug-in hybrids took up eight per cent. All new car segments experienced a decline during July, but Britain’s most popular car types remained superminis, followed by lower medium and dual-purpose vehicles.

The SMMT has revised its outlook for the rest of the year, with around 1.82 million units expected to be registered by the end of 2021. Though this is up 11.7 per cent on 2020, it still represents a fall of 1.86 million predicted in April and down around 21.8 per cent on the average new car market over the past decade.

Mike Hawes, SMMT Chief Executive, said: “The automotive sector continues to battle against shortages of semiconductors and staff, which is throttling our ability to translate a strengthening economic outlook into a full recovery.

“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.

“As a result, we have downgraded the market outlook slightly for 2021. The bright spot, however, remains the increasing demand for electrified vehicles as consumers respond in ever greater numbers to these new technologies, driven by increased product choice, fiscal and financial incentives and an enjoyable driving experience.”