Supply chain issues are causing OEMs to feel the pinch more than ever as they struggle to fulfil increasing orders, on top of a backlog of deliveries. With a protracted shortage of vehicles, it is prudent for drivers and fleet operators to be planning further ahead, increasing their renewal cycle from 6 to 9 months in advance. For leasing companies, there is an onus on providing flexible extension agreements to help alleviate the current situation.
Economic headwinds such as rising energy costs, fuel costs, inflation and a squeeze on household incomes could impact new vehicle demand. With grants for BEVs ongoing until at least next March, however, interest rates still low and electric cars benefiting from lower running costs, there are significant benefits for drivers who can order new vehicles now.
Supply chain impacts and the chip shortage will continue in the short term to frustrate the industry. with many auto manufacturers attributing falling production numbers (UK car production fell 20% in January this year) and high levels of unfulfilled customer orders to the shortage in semi-conductors.
Leasing.com is forecasting a 50% growth in enquires in 2022, which would see the total value rise to £1.64bn by the end of 2022. The numbers make for positive reading, especially considering that recent Society of Motor Manufacturers and Traders (SMMT) data shows that 2021 new car registrations were still down 28.7% on pre-covid levels and up only 1% up on 2020.
New car registrations are expected to rise 15.2% on 2021, to 1.897 million units. This is a downward revision from October’s outlook of 1.96 million, as the ongoing semiconductor shortage, increasing costs of living and rising interest rates are expected to dampen some demand in 2022. A 2022 market of 1.897 million would still be down -17.9% on the pre-pandemic 2019, but the recovery is expected to continue into 2023, with the market projected to climb above two million units for the first time since 2019.
Despite the challenges posed in the last year, electric vehicles continued to perform above and beyond expectations. In December, sales of battery (BEV) and plug-in-hybrid (PHEV) electric vehicles accounted for over a third (33%) of all sales. Across the whole of 2021, this figure was 19%, compared to just 11% in 2020.
Could the tide be finally turning for new car sales with forecourts gradually getting busier and many dealers are working overtime to get cars to customers who have already placed orders. But the patchy supply of new vehicles continues to peg back the number of sales dealers can make.
Plug-in vehicle uptake rates have accelerated so rapidly that SMMT forecasts that more will join Britain’s roads in 2021 than during the whole of 2010 to 2019 combined. Businesses and consumers are expected to take up around 287,000 of the latest zero-emission capable cars by the end of the year.
With the government now reaching for a 78% reduction in emissions by 2025 and the sale of fuel-based vehicles due to be abolished altogether from 2030, these figures combined with those from Time Finance point towards continued growth in the uptake for wholly electric vehicles.
Registration of 215,312 cars during the month represented a fall of 34.4% on September 2020, when pandemic restrictions were significantly curtailing economic activity. September is typically the second busiest month of the year for the industry, but with the ongoing shortage of semiconductors impacting vehicle availability, the 2021 performance was down some 44.7% on the pre-pandemic ten-year average.
According to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). 68,033 units were registered, the weakest since August 2013, and down 7.6% against the average recorded over the last decade, due in part to constrained supply as the global shortage of semiconductors, an issue born of the pandemic, continues to undermine production volumes.
July saw a huge contraction in sales of both diesel and petrol vehicles, with electric and hybrid vehicles the only areas showing signs of growth. Concerns about environmental impacts, as well as ever-evolving patterns of work and social life, have driven many consumers away from traditional petrol and diesel models.
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%.
CONSUMER demand for electric vehicles has overtaken diesel engines for the first time in the new car market. Sales enquiry data from Leasing.com shows consumer demand for EVs – battery electric vehicles (BEVs), plugin hybrid [...]
Pent-up demand for motors is great news for dealers across the country, however there are questions around the ability of manufacturers to meet this huge appetite. Used cars are continuing to hold value as people ordering new vehicles have to deal with extended wait times, and the prospect of bouncing back to 2019 registration levels still seems a little way off.
