Reopening of showrooms boosts new car sales in April
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The reopening of England’s car showrooms boosted sales of new vehicles in April, prompting the car industry to hail the “light at the end of the tunnel” after lockdown.
In total, 141,583 new vehicles were registered last month, a thirty-fold jump on the same month a year ago, when the initial coronavirus lockdown all but shut the country.
However, despite the artificial jump, sales are still down 12.9 per cent on the decade-long average of 162,537 vehicles.
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As a result of the reopening, as well as the UK’s rapid vaccination regime, the Society for Motor Manufacturers and Traders (SMMT), which compiles the data, said it was raising its full year forecast for sales 13.9 per cent to 1.83m.
Commenting on today’s figures, SMMT boss Mike Hawes said: “After one of the darkest years in automotive history, there is light at the end of the tunnel.
“A full recovery for the sector is still some way off, but with showrooms open and consumers able to test drive the latest, cleanest models, the industry can begin to rebuild.
“Market confidence is improving, and we now expect to finish the year in a slightly better position than anticipated in February, largely thanks to the more upbeat business and consumer confidence created by the successful vaccine rollout.”
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He also said 2021 was set to be a record year for electric vehicle (EV) sales, with one in every seven sales expected to be of an EV.
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Sales of electric and hybrid vehicles made up 13.2 per cent of market share in April, with hybrid sales narrowly outweighing battery electric.
However, Seán Kemple, managing director of Close Brothers Motor Finance warned that the current shortage of semiconductor chips could yet knock the recovery off course.
“Just as things are looking up for the motor industry, it’s been slammed by a wave of turbulence caused by a global semiconductor shortage. And given how vital these chips are to the industry, in use in everything from power steering to parking sensors, this will have an impact,” he said.
“Car manufacturers like Ford, MINI and Jaguar Land Rover are halting production in the face of severe disruption, which escalated in April. While new car sales have shot up this month, there’s no doubt that demand will be squeezed by an ensuing supply crisis.”
An EV requires about 3,500 of the chips, about three times as many as a conventional internal combustion engine-powered vehicle.
Michael Woodward, Deloitte’s automotive lead, said the ongoing shortage meant there will be “little respite for the sector”.
“As a result of the ongoing shortage, some manufacturers are struggling to meet demand and, in some cases, has also meant significantly reducing production forecasts, cutting hours and even idling factories.
“Global car production is estimated to have been cut by 700,000 between January and March and with warnings that chip shortages could persist into next year, this is an issue that is not going away. We could see fundamental and lasting changes to supply chains.”