Car sales in the UK fell by a fifth last month compared to the previous year as semiconductor shortages continued to rise and the industry expressed concern about the impact of inflation on market.
New car registrations in the UK fell 20.6% year-on-year to 124,400 on the second-weakest May since 1992, according to the Society of Motor Manufacturers and Traders (SMMT), a pressure group.
New and used car dealerships have experienced strong demand for vehicles since dealerships reopened after the first Covid pandemic closures in 2020, which had saved more for richer households.
However, automakers have been unable to meet demand due to the crisis in global supply chains, with semiconductors used to make computer chips that control everything from entertainment systems to in car wipers and car batteries, they are especially scarce. Intel CEO Pat Gelsinger said last month that he did not expect the shortage to end by 2024, later than most carmakers expected.
Car sales chart in the UK
Other scarce parts include cable harnesses, relatively simple components that group cables used to control different systems in a car. Several carmakers obtained cable harnesses from Ukraine, where production has been disrupted by the invasion of Russia.
The SMMT said UK carmakers were focusing on delivering electric vehicles as they try to comply with tougher carbon regulations. Electric vehicles accounted for nearly one-fifth of all new car sales in May, and up 14% next year, with a record 92,000 sold.
Overall, the UK new car market remained almost a third below the pre-2019 pandemic level despite all orders from manufacturers ’books.
The auto industry warns that high inflation could stifle demand for new cars in the coming months, as consumers have less money to spend and are less likely to take out large loans that are commonly used to buy cars. us.
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Sue Robinson, executive director of the National Franchised Dealers Association, another pressure group, said “increasing cost of living pressures in the UK” also contributed to the “new vehicle market” as well as shortages. of chips.
Mike Hawes, CEO of SMMT, said: “In another challenging month for the new car market, the industry continues to struggle with the shortage of global parts, with the growing incorporation of electric vehicles into batteries one of the few bright spots.
“Free with clean zero [carbon emissions] it means renewing vehicles on our roads at a steady pace, but with rising inflation and declining household incomes, this will become increasingly difficult if companies and private buyers do not have the confidence and courage to do so. -ho “.