UK car sales were down in July

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

The new Vauxhall Corsa was tthe UK's best-selling car in January
The new Vauxhall Corsa was tthe UK's best-selling car in January

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 by the Society of Motor Manufacturers and Traders. 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 vehicles, 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.

Jaguar Land Rover, which has its engine manufacturing centre at the i54 at Wolverhampton, saw big falls in sales compared to a year ago.

There were 3,240 Land Rovers sold – down 43.4 per cent – and Jaguar sales fell 53.1 per cent to 1,288.

Longbridge-based MG, which has its cars made abroad, was up 30.6 per cent to 2,411.

Volkswagen was the top selling brand at 12,454, with the new Vauxhall Corsa is the UK’s best-selling new car so far this year.

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 cars 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.”

James Fairclough, chief executive of AA Cars, said: “The reopening of the economy has given consumers plenty of ways to spend their free time, and although it’s disappointing to see car sales fall on an annual and monthly basis, it is not surprising considering that many people will be prioritising socialising and going out over shopping for a new car.

“The market is often quieter in the summer, but there are signs that consumer confidence is building as the economy bounces back, and there are reasons to be optimistic that drivers will soon be returning to forecourts in greater numbers.

“The Bank of England continues to report increased borrowing, and the number of car finance applications remains strong."

Alex Buttle, director of used car marketplace Motorway.co.uk, said: “Lacklustre new car sales last month, the lowest July figures in more than 20 years, continued to reflect production issues bedeviling carmakers at the moment.

“A fast post-pandemic rebound has not materialised, but the industry will be pleased with further spectacular growth in electric car sales, which made up almost a fifth of all new car registrations in July.

“The ongoing semiconductor shortage continues to cause huge disruption to UK production lines, and is likely to do so for the rest of the year and well into 2022.

“And with the ‘pingdemic’ afflicting many workers, some major manufacturers have now been struck by a staff shortage, as a steady flow of staff have had to self-isolate after being pinged by the NHS app.

“Dealers have been left in an impossible situation as car production has slumped. While there is potentially strong demand out there to buy a new car, many frustrated buyers are not willing to wait six to nine months, or even longer on some models, to take delivery of their new motor"

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