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UK car market sees weakest October since 1991

·2-min read
Cars at the Vauxhall plant in Ellesmere Port, Cheshire. Workers at Vauxhall's UK car factory are waiting for news about the future of the plant, with an announcement expected later on Thursday. Picture date: Wednesday February 24, 2021.
Cars at the Vauxhall plant in Ellesmere Port, Cheshire. Workers at Vauxhall's UK car factory are waiting for news about the future of the plant. Photo: PA

Demand for new cars fell by around a quarter in October, compared with the same month the year before, declining for the fourth consecutive month. 

106,265 new cars were registered, according to the Society of Motor Manufacturers and Traders (SMMT) which compiles the data. 

The SMMT said it expects a total of 1.66 million new cars to be registered in the UK this year, which would represent a 1.9% increase on 2020. This is a -8.8% revision down from previous forecasts due to ongoing supply chain issues. 

Plug-in vehicle uptake remained positive in the month before COP26, with battery electric vehicles (BEVs) equalling their September market share of 15.2% with 16,155 units, while plug-in hybrid vehicles (PHEVs) grew to 7.9% or 8,382 units.

Plug-in vehicles now account for 16.6% of all new car registrations in 2021, which, when joined by a further 9.1% from hybrid electric vehicles, means that 25.7%, or more than a quarter of the new car market has been electrified year-to-date.

Despite this strong performance in electrified vehicle registrations, the overall market’s monthly performance was the weakest period since October 1991. 

Demand from large fleets fell by a substantial -40.4%, driving most of the decline. Private demand fell by a more modest -3.3%, although this apparent small decline is compared against weak consumer uptake during the pandemic-affected October 2020.

Read more: COP26: CBI calls for serious action on climate

The figures follow a bleak September, where British car production saw a year-on-year fall of 41.5%, as the industry continued to be plagued by global supply chain issues and chip shortages.

Output continues to be hampered by the production stoppages caused by the ongoing global shortage of semiconductors, as well as the loss of production capacity arising from the closure of one of the UK’s larger plants.

While the October budget confirmed £817m ($1.1bn) of funding for the transition towards electric vehicles in automotive manufacturing and business rate relief on renewable energy, the industry continues to battle against the ongoing effects of the pandemic.

A partial recovery is forecast for 2022, with the industry anticipating some 1.96 million new car registrations next year, said the SMMT on Thursday. 

This will be driven by continued demand for plug-in vehicles, which is expected to continue at pace with new BEVs anticipated to be more popular than new conventional and mild-hybrid diesels by the end of 2022. Plug-in cars are also expected to account for more than a fifth (21.5%) of all new car registrations next year.

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