May new car sales: Second weakest since 1992

Published:  06 June, 2022

Continuing supply issues helped to make May’s new car sales the second lowest since 1992, beaten only by May 2020, with a 20.6% drop compared with last year, according to the latest figures from the SMMT.

The month’s total of 124,394 cars sold also put the market 32.3% below pre-pandemic 2019. On the plus side, battery electric vehicle (BEV) registrations were up 17.7%, and made up 12.4% of the total. At the same time, plug-in hybrid sales were down 25.5%, and hybrids were up 12%. This meant that three in 10 new cars sold in May were electrified.

Commenting on the figures, SMMT Chief Executive Mike Hawes said: “In yet another challenging month for the new car market, the industry continues to battle ongoing global parts shortages, with growing battery electric vehicle uptake one of the few bright spots. To continue this momentum and drive a robust mass market for these vehicles, we need to ensure every buyer has the confidence to go electric. This requires an acceleration in the rollout of accessible charging infrastructure to match the increasing number of plug-in vehicles, as well as incentives for the purchase of new, cleaner and greener cars.”

He added: “Delivering on Net Zero means renewing the vehicles on our roads at pace but, with rising inflation and a squeeze on household incomes, this will be increasingly difficult unless businesses and private buyers have the confidence and encouragement to do so.”

NDFA Chief Executive Sue Robinson observed: “Supply side issues, alongside increasing cost of living pressures in the UK are resulting in a subdued new vehicle market. The sale of electric vehicles continues to drive new vehicle registrations. Franchised dealers that have Electric Vehicle Approved (EVA) accreditation are enabling customers to buy an EV with confidence, something that will continue going forward.”

However, despite ongoing EV enthusiasm, AA Car CEO James Fairclough believes that demand for new cars could drop as supply issues continue to plague the industry: “Things are going from bad to worse for new car sales as the ongoing shortage of supply runs into a new problem - weakening buyer demand. With the exception of EVs, new car sales have been weak for much of 2022. At the start of the year this could be attributed largely to a chronic shortage of new vehicles arriving in showrooms.

“As the cost of living crisis begins to bite, with consumers simultaneously grappling with surging fuel, energy and food prices, some are opting to postpone big ticket purchases like a new car. The supply problems show little sign of abating, as lockdowns in China and the war in Ukraine exacerbate the shortage of key materials like steel and semiconductors, and hold back levels of car production. Against that backdrop, the apparent softening of buyer demand now threatens to create a perfect storm for new car sales.”

It’s not all bad news according to James: “This emerging trend is prompting a steady stream of prospective buyers to switch their focus to the second-hand market instead, and many dealers report that sales of used vehicles are outpacing those of brand new models. AA Cars research shows that a fifth of drivers are still planning to buy a car this year, and demand and prices are holding up well for the most popular second-hand models.”

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