New car sales at lowest level since June 1996

Salesman giving car keys to customer and shaking his hand

Been waiting to get your hands on a new car? Well you might have to wait a little while longer.

According to the Society of Motor Manufacturers and Traders (SMMT), global chip shortages are causing a delay with new car models, which is just one of many factors contributing to a drop in new car sales in the UK.

Lowest level of sales in 26 years

In June, new car sales fell by almost a quarter. Registrations of new cars were down 24% last month compared with June 2021, making it the worst June for car sales since 1996.

Around 800,000 new cars were sold during the first half of the year, down 12% compared with the same period in 2021, and the second-weakest first-half performance since 1992.

Shortages of components, such as semiconductors, means manufacturers are struggling to keep up with demand, resulting in delays for new cars. Drivers of these new cars have been waiting more than 12 months for their vehicles to be delivered.

More than one problem

It’s not just chip shortages that are contributing to a drop in car sales.

Jim Holder, editorial director of the magazine and website What Car? said new car orders are being delayed, while rising energy bills are pushing up manufacturing costs, which is increasing prices for consumers.

“The result is longer waiting times on cars which will cost more to buy,” he said.

However, it’s not all bad news. Car production in May grew for the first time since June 2021, up 13.3%, with 62,284 units leaving factory gates, according to SMMT figures.

The sale of new electric cars is also increasing as a result of rising petrol and diesel prices. Ben Nelmes, co-founder of green motoring consultancy New AutoMotive, said electric cars “defied gravity” last month by “continuing to grow while overall new car registrations were down by a quarter.”

Drivers are now also buying cheaper car models to get better value for money.

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