New UK car sales more than a third down compared with 2019 despite August rise

Plans for millions of new cars had to be scrapped due to shortages of computer chips

New car sales inched up in August, but remain a more than a third down on pre-pandemic levels, according to preliminary figures from the Society of Motor Manufacturers and Traders. Photo: PA

New car sales inched up in August, but remain a more than a third down on pre-pandemic levels as the impact of computer chip shortages persists.

Data released by the Society of Motor Manufacturers and Traders on Monday showed new car registrations rose by 1.2 per cent last month compared with the same period last year.

Almost 69,000 new cars were registered in the first monthly growth since February.

But new registrations so far this year are more than a third down at 35.3 per cent compared with 2019, the society said.

"August's new car market growth is welcome, but marginal during a low volume month,” said the society's chief executive Mike Hawes.

"Spiralling energy costs and inflation, on top of sustained supply chain challenges, are piling even more pressure on the automotive industry's post-pandemic recovery, and we urgently need the new prime minister to tackle these challenges and restore confidence and sustainable growth.”

With August being a traditionally quiet month for the industry as many people choose to wait for new number plates to be released, September will be the first true test, Mr Hawes added.

Car manufacturers were forced to scrap plans for millions of new vehicles over the past two years due to shortages of computer chips, which are also known as semiconductors.

Experts said the problem was developing for years before the pandemic, in part due to the rise of 5G, which increased demand.

The components are used in many products, including washing machines, smartphones and cars, which often use thousands of individual chips.

Estimates suggest as many as 13 million vehicles were cut from production as a result of the shortage, which is showing signs of easing.

But the impact is expected to be long lasting after companies’ “war room operations” became embedded features of vehicle development.

"A slight easing of global supply shortages is leading to a welcome increase in UK car production and new car sales," Richard Peberdy, UK head of automotive at professional services company KPMG, said.

"But a rising cost of living threatens consumer appetite, whilst rising energy and other inflationary costs are putting pricing under pressure.

"The remainder of 2022 is set to further challenge the UK car industry, despite the welcome easing of component availability."

The figures also showed the uptake of pure electric new cars is slowing, with year-to-date registrations up 48.8 per cent, compared with 101.9 per cent at the end of March.