Deloitte comments on SMMT new car registration figures

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

“New car sales in December declined by -18% compared to the same period in the previous year, as fleet sales suffered major losses, falling by -40%.

“The disappointing end to the year is a consequence of two major headwinds faced by the industry in December. Firstly, supply issues caused by the ongoing semi-conductor shortage continued to act as a drag on sales, with longer-than-usual waiting times still a reality for many consumers. Meanwhile, the emergence of a new COVID-19 variant dented consumer confidence, with some likely postponing showroom visits in the immediate run up to Christmas.

2021 and the year ahead

“Overall, 2021’s sales have only marginally improved from the pandemic-induced lows of 2020. 1.65 million new cars were sold across the entirety of the year, compared to 1.63 million in 2020.

“At the start of 2021, many voices in the industry were optimistic that we would see substantially higher growth than 1%. However, more COVID-19 restrictions and the semi-conductor shortage - which caused supply issues throughout the entire year – limited any chance of a sharp recovery.

“As we enter 2022, both issues continue to loom large over the automotive industry and many manufacturers expect sales to be compromised well into the second half of 2022.

The year EVs became mainstream

“Despite the challenges posed in the last year, electric vehicles continued to perform above and beyond expectations. In December, sales of battery (BEV) and plug-in-hybrid (PHEV) electric vehicles accounted for over a third (33%) of all sales. Across the whole of 2021, this figure was 19%, compared to just 11% in 2020.

“With more than one in ten new cars now fully electric, 2021 is the year that EVs became mainstream. However, there are still barriers that the industry needs to overcome to sustain growth ahead of the 2030 ban on polluting vehicles.

Some EV barriers remain

“Deloitte’s Global Automotive Consumer Survey data this week highlights that UK consumers still identify driving range, and a lack of public charging infrastructure among the main barriers to purchasing an EV.

“In reality, driving range is becoming less of an issue for EVs. Just this week we saw a number of new models and prototypes unveiled, pushing the boundaries of what a battery is capable of. However, the perceived lack of public charging infrastructure remains a potential issue, with significant investment required to avoid an imbalance whereby EVs are only a realistic option for consumers with off-street parking.

“Consumers also expressed concern over the perceived price premium attached to EVs at a time when subsidies are being reduced.”

-Ends-

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