Global supply chain challenges hit new car and van registrations

New car registrations in March have fallen to their lowest levels in over two decades, with van registrations also down by more than a quarter year-on-year, according to data from the Society of Motor Manufacturers and Traders (SMMT).

March is traditionally one of the busiest months for new vehicle purchases as drivers look to purchase vehicles on the latest numberplates, however March 2022 saw the lowest number of new vehicles registered by the DVLA since 1998, when new numberplate were only released once each year in September.

Sales of new vans and other light commercial vehicles also saw similar poor performance, with new registrations down 27.6% compared with March 2021.

The SMMT has blamed the poor performance in the motor trade on ongoing supply chain problems, particularly the supply of semiconductors for electronics – China is the main producer of these components, however their export has been significantly hampered over the last two years by coronavirus lockdowns in the country.

With manufacturers struggling to secure components for vehicles, consumers in the UK have seen delivery of their new cars and vans delayed. The challenges in securing new vehicles was among contributing factors that saw Greater Manchester’s Clean Air Zone delayed, as business owners in the city-region were unable to acquire compliant new vehicles in time to avoid a daily charge.

Mike Hawes, SMMT Chief Executive, commented,

“March is typically the biggest month of the year for the new car market, so this performance is deeply disappointing and lays bare the challenges ahead. While demand remains robust, this decline illustrates the severity of the global semiconductor shortage, as manufacturers strive to deliver the latest, lowest emission vehicles to eagerly awaiting customers.”

While the SMMT reported registrations of new vehicles had reached their lowest levels in over 20 years, demand for electric vehicles (EVs) bucked the trend for both cars and commercial customers.

Year-to-date sales of battery electric vans are up 68.9% compared to the first three months of 2021. For cars, YTD registrations of fully-electric vehicles was more than double 2021 figures, with hybrid categories (except hybrid diesel vehicles) also showing strong growth on last year’s figures. Despite this growth, EVs still only represent between 5-6% of new vehicles being sold.

Mike Hawes added:

“Placing orders now will be beneficial for those looking to take advantage of incentives and lower running costs for electric vehicles, especially as the Ukraine crisis could affect supply still further. With increasing household and business costs, government must do all it can to support consumers so that the growth of electric vehicles can be sustained and the UK’s ambitious net zero timetable delivered.”