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Gloucestershire Business News

New car market recovery continues to be squeezed by supply issues

New car registrations in June grew 28 per cent year-on-year to 186,128, according to the Society of Motor Manufacturers and Traders (SMMT)'s latest figures.

The trade body said the monthly performance was again artificially lifted through comparison with June 2020, when the UK began to emerge from the first pandemic lockdown and showrooms in England opened up at the beginning of the month.

Compared with the previous decade average however, monthly registrations were down 16.4 per cent, while total registrations for Q2 2021 fell short of industry expectations by around 9,000 units partly as the ongoing global semiconductor shortage acted as a limiting factor on supply. As a result, overall registrations for the first half of the year are down -26.8 per cent.

With the latest SMMT research showing electrification could create 40,000 new jobs by 2030, plug-in vehicles continued to increase market share.

Combined, battery electric (BEVs) and plug-in hybrid vehicles (PHEVs) accounted for 17.2 per cent of new vehicles hitting the road (31,981 units). BEVs accounted for more than one in 10 registrations (10.7 per cent). PHEV uptake, however, continued to grow faster than BEV uptake for the third month running, following reductions to the Plug-in Car Grant in March.

All vehicle sizes - bar executive and multi-purpose - saw growth in June, with the strongest growth seen in the mini segment, which had been relatively weak for several months. Superminis were the most popular car class, accounting for 34.1 per cent of registrations, followed by lower medium (26.8 per cent) and dual purpose (24.5 per cent).

While economic confidence continues to strengthen, with some independent forecasts for GDP growth reaching eight per cent in 2021, SMMT said new registrations still remain adrift of pre-pandemic levels.

SMMT chief executive, Mike Hawes said: "With the final phases of the UK's vaccine rollout well underway and confidence increasing, the automotive sector is now battling against a 'long Covid' of vehicle supply challenges.

"The semiconductor shortages arising from Covid-constrained output globally are affecting vehicle production, disrupting supply on certain models and restricting the automotive recovery. However, rebuilding for the next decade is now well underway with investment in local battery production beginning and a raft of new electrified models in showrooms.

"With the end of domestic restrictions later this month looking more likely, business and consumer optimism should improve further, fuelling increased spending, especially as the industry looks towards September and advanced orders for the next plate change."

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