Deloitte comments on SMMT new car registration figures has been saved
Deloitte comments on SMMT new car registration figures
4 June 2021
Jamie Hamilton, automotive director and head of electric vehicles at Deloitte, said:
“With showrooms open for the whole month, and with both business and consumer confidence on the rise, it is disappointing to see that sales of new cars failed to return to pre-pandemic levels in May. Today’s figures suggest that the expected post-lockdown recovery might be slower than first thought.
Semi-conductor shortages continue to bite
“The ongoing global shortage of semi-conductors means that there is little respite for the sector and disruption is expected to last at least through to the end of the year. Manufacturers have responded so far by employing a variety of tactics to minimise both near- and long-term damage. This includes shifting assembly to more in-demand products, bypassing the installation of some parts and modules until a later date, and securing alternate sources of semi-conductor supply.
“Some manufacturers are struggling to meet consumer demand and, in some cases, are significantly reducing production forecasts, cutting hours, and even idling factories.
“For dealerships, stock is visibly low for some and consumers themselves are also feeling the impact, waiting significantly longer than usual for delivery of their new vehicles. As a result of delays, some consumers are now turning to the used car market, but stock is also an issue here so it is no surprise that we have seen the value of used cars grow significantly over the last month.
EVs continue to outperform the market
“Electric vehicles continued to see significant growth in May, with battery electric and plug-in-hybrid achieving a combined 15% market share (8% and 6%, respectively). This put them ahead of pure diesel yet again, which captured just 10% of the market.
“Almost a quarter of cars produced in the UK are now electric in some form, demonstrating the demand for ultra- low and zero emission vehicles. As this figure rises, we expect to see increasing calls for battery production to come to the UK. The majority of the world’s batteries are currently produced in Asia, but any cost of transportation reduction would be welcomed by many UK manufacturers.
“Although future EV growth is almost guaranteed, the rate required to achieve 100% penetration by 2030 will only happen if consumer concerns about charging infrastructure are put to rest. Many will find reassurance in the investment recently announced by the government towards rapid charging. However, there still needs to be a longer term strategy in place, to encourage consumers to go fully electric.”
Notes to the editor
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