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THE ongoing pandemic and resultant supply and logistics issues all contributed to a new car sales market down 28.7%  from pre-pandemic levels las year according to figures released by the SMMT.

The figures showed 2021’s new car registrations were 1.0% above 2020’s sales but remained below pre-pandemic levels by 28.7%; a total of 1.65 million units were registered.

There was some encouragement in that the electric vehicle market where 190,727 battery electric vehicles were registered in 2021, alongside 114,554 plug-in hybrid vehicles, accounting for 18.5% of new car registrations. In December, the market was 18.2% lower than the same month in 2020, but sales of BEVs grew by 26.4%.

Demand from private buyers was up 19.9% in December compared to the same time in 2020, and in 2021 it was 7.4% higher than in the previous year.

Jamie Hamilton, automotive director and head of electric vehicles at Deloitte, said that the disappointing end to the year was a consequence of two major headwinds faced by the industry in December. Supply issues caused by the ongoing semi-conductor shortage continued to act as a drag on sales, with longer-than-usual waiting times still a reality for many consumers. Meanwhile, the emergence of a new COVID-19 variant dented consumer confidence, with some likely postponing showroom visits in the immediate run up to Christmas.

Hamilton said: “Overall, 2021’s sales have only marginally improved from the pandemic-induced lows of 2020. 1.65 million new cars were sold across the entirety of the year, compared to 1.63 million in 2020.

“At the start of 2021, many voices in the industry were optimistic that we would see substantially higher growth than 1%. However, more COVID-19 restrictions and the semi-conductor shortage – which caused supply issues throughout the entire year – limited any chance of a sharp recovery.

“As we enter 2022, both issues continue to loom large over the automotive industry and many manufacturers expect sales to be compromised well into the second half of 2022.

“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.

“With more than one in ten new cars now fully electric, 2021 is the year that EVs became mainstream. However, there are still barriers that the industry needs to overcome to sustain growth ahead of the 2030 ban on polluting vehicles.

“Deloitte’s Global Automotive Consumer Survey data this week highlights that UK consumers still identify driving range, and a lack of public charging infrastructure among the main barriers to purchasing an EV.

“In reality, driving range is becoming less of an issue for EVs. Just this week we saw a number of new models and prototypes unveiled, pushing the boundaries of what a battery is capable of. However, the perceived lack of public charging infrastructure remains a potential issue, with significant investment required to avoid an imbalance whereby EVs are only a realistic option for consumers with off-street parking.

“Consumers also expressed concern over the perceived price premium attached to EVs at a time when subsidies are being reduced.”

Meryem Brassington, Electrification Propositions Lead at Lex Autolease said that accelerating electric vehicle adoption must remain at the top of the industry’s priorities. She added: ” Continued fiscal support has been the driving factor behind increased adoption levels to date but we cannot afford to let this slip. We’ve already seen reductions to the Plug-in Car Grant and any future tax or grant changes must be gradual and proportional until we begin to see cost parity between some ICE and EV models.

“What’s more, the used car market will increasingly come into focus this year, especially as higher carbon emitting vehicles are being phased out. Without fiscal support to encourage second-hand acquisition, growth may stall and impact the overall picture of the UKs electric car parc.”

Karen Johnson, Head of Retail and Wholesale at Barclays Corporate Banking, pointed out that the festive season is usually quiet for car dealers, and the last month of 2021 stayed true to this reputation. Most of the registrations that did get put through in December were likely sorted in the weeks before, whilst the 109,000 cars that did get registered were even fewer than in recent years: 132,000 in 2020, and 149,000 in 2019.

She added: “Looking at 2021 as a whole, the single largest issue that defined the pattern of vehicle registrations is clear: supply issues. Dealers simply haven’t had the new cars available to meet consumer demand, and this has impacted registrations across the board.

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“The ongoing and evolving impacts of Covid-19, alongside growing inflationary pressures, are also concerning for many dealers. Consumer confidence was strong for most of 2021, but there are signs it started to wane in December. If this trend continues over the next year, it might impact on the number of people willing commit to ‘big-ticket’ purchases.

“This time last year, the SMMT predicted the industry would bounce back from the disappointment of 2020 and would see around two million new registrations in 2021. Unfortunately this hasn’t materialised, with just over 1.65 million cars registered (an increase of 1% year on year). Many across the industry are now wondering when registrations will get back to the levels seen pre-Covid.

“However it isn’t all doom and gloom. Electric sales have been a clear positive to emerge from the last year, and the growth of this sector will be key to driving recovery. Dealers will be adapting their forecourt operations to match this (and every other) aspect of the UK motor industry, and are well positioned to adapt and succeed as we move into 2022.”