Press releases

Deloitte comments on SMMT new car registration figures

04 February 2022

 Jamie Hamilton, automotive director and head of electric vehicles at Deloitte, said:

“Year-on-year, new car sales in January grew by 28%, driven primarily by private sales (64%). However, with much of the UK under strict COVID-19 restrictions in January 2021, today’s sales figures remain below pre-pandemic averages.

“It is hard to gauge what January 2022’s results signal for the year ahead given a combination of factors, including a growing squeeze on the cost of living and unresolved supply chain issues. It may not be until well into the second half of the year that we can more accurately establish what the baseline is for UK car sales.

“The good news for manufacturers and dealers is that supply pressures caused by the semi-conductor shortage are starting to ease. Global markets – most notably the US and China – saw a rebound in car sales at the end of 2021, with reports of a similar story in automotive production in East Asia and Mexico.

“The point at which supply issues are fully resolved, it’s likely we’ll see substantial pent-up demand released in the UK, which bodes well for the industry’s prospects in 2022. Until then, rising prices, especially in the used car sector, have meant some manufacturers and dealers have been able to offset the impact of declining volumes on their bottom line.

EV growth set to continue

“The EV sector has started the year as they ended the last; as clear winners compared to their petrol and diesel equivalents. Battery electric (BEV) and plug-in hybrid electric (PHEV) vehicles grew by 131% and 47% respectively in January, and now hold a combined 20% share of the market. This compares to 13% in the same period last year.

“More than one in ten new cars sold in the UK are fully electric. To sustain the rate of growth of EV sales ahead of the 2030 ban on polluting vehicles, the industry needs to overcome a number of barriers. For example, UK consumers still identify driving range and lack of public charging infrastructure as the main two barriers to purchasing a fully electric vehicle.

“In reality, new EV models are offering longer-lasting battery charges but the perceived lack of public charging infrastructure remains an issue. Significant investment is required to avoid a scenario where EVs are only a realistic option for consumers with off-street parking.

“The perceived price premium for an EV is also identified by UK consumers as a barrier, at a time when subsidies are being reduced. Add in the continuing squeeze on incomes, and many consumers feel they simply cannot afford an EV for now.”

-Ends-

About Deloitte

In this press release references to “Deloitte” are references to one or more of Deloitte Touche Tohmatsu Limited (“DTTL”) a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity.

Please see deloitte.com/about for a detailed description of the legal structure of DTTL and its member firms.

Deloitte LLP is a subsidiary of Deloitte NSE LLP, which is a member firm of DTTL, and is among the UK's leading professional services firms.

The information contained in this press release is correct at the time of going to press.

For more information, please visit www.deloitte.co.uk

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