October 17, 2021

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New car sales plummet in September as chip shortages bite, SMMT reveals

Chips are used in the production of new cars   (PA Archive)

Chips are used in the production of new cars (PA Archive)

Sales of new cars plunged in September – usually a buoyant month for the sector – amid an ongoing global semiconductor shortage, latest figures from the Society of Motor Manufacturers and Traders (SMMT) have revealed.

Registrations fell by nearly 35% year-on-year to 215,312 in the month . It was the lowest September level seen since 1998, a year before the biannual number plate system was introduced 1999.

The monthly performance came in at nearly half of the pre-pandemic ten-year average.

The SMMT stated that “supply issues caused by semiconductor shortages continue to plague the industry”.

Global chip production has slowed amid supply chain and logistics issues, stymieing development and supply of new cars. Car manufacturing costs have also risen.

Consumers are now facing long wait times for new models and this, along with pandemic savings and wariness of public transport, has helped the used car market soar.

By the end of summer, however, large listed dealerships were warning that supply of both new and used cars was becoming tight, and vehicle delivery dates volatile, as wider supply chain issues also hit home.

SMMT CEO, Mike Hawes, said: “This is a desperately disappointing September and further evidence of the ongoing impact of the Covid pandemic on the sector.

“Despite strong demand for new vehicles over the summer, three successive months have been hit by stalled supply due to reduced semiconductor availability, especially from Asia.”

He added: “Nevertheless, manufacturers are taking every measure possible to maintain deliveries and customers can expect attractive offers on a range of new vehicles.”

Seán Kemple, Managing Director of Close Brothers Motor Finance, said: “The supply chain pressures are unlikely to ease up this side of Christmas and with second-hand vehicles going for premium prices, customers looking for a car are left in an unenviable position.”

In brighter news, more Britons bought a new electric car last month than ever before with 32,721 joining the road, the SMMT said. EV vehicles claimed 15% of the market “reflecting consumer appetite”.

The figures came as engineers Melrose warned it is “heavily constrained” by the global semi-conductor shortage and said delays are getting worse.

CEO Simon Peckham said: “Tightened supply of semi-conductors to the automotive industry are frustrating and difficult to plan for, but whilst they affect current trading, they don’t impact long-term value.”

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