New car sales fell by a third to their lowest July level since 1998 as the rising number of people self-isolating undermined demand, according to figures from an industry body.
Registrations fell by 29.5 per cent to 123,296 vehicles, according to the Society of Motor Manufacturers and Traders (SMMT).
It said the figures were disappointing even though the decline was exaggerated because last July’s figures were artificially inflated. Showrooms enjoyed their first full month out of lockdown in July last year, which caused registrations to spike. The SMMT said that the latest figures were still down 22.3 per cent, on average, over the past decade.
Staff absences and a critical shortage of semiconductors have been holding back output of new cars for several months but the latest figures suggest that the “pingdemic” is also weighing on demand as prospective consumers have been unable to visit showrooms.
Mike Hawes, chief executive at the SMMT, 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.
Advertisement
“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 SMMT did identify some bright spots, however. Plug-in vehicles now make up 17.1 per cent of the market after more than 21,039 units were registered in July. Electric vehicles are expected to account for more than one in six new cars acquired in 2021.
Battery electric vehicles accounted for 9 per cent of registrations, while plug-in hybrids reached 8 per cent.
Richard Peberdy, UK head of automotive at KPMG, said: “Electric models are growing their market share, which reflects how the economics are increasingly stacking up for consumers. More companies are offering salary sacrifice schemes to their staff for these vehicles, often making the choice as affordable as petrol or diesel, which is a major tipping point for the battery electric vehicle sector.”
