New car sales plummet 16 percent in the UK in April as Ukraine hits supply chain

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UK new car registrations fell by 15.8 percent to 119,167 units in April, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). Despite showrooms being open for the entire month, unlike the previous year which saw lockdown restrictions in place until 12 April, global supply chain shortages, exacerbated by the war in Ukraine have hit the industry hard.

However, the news was tempered somewhat as Battery electric vehicle (BEV) registrations continued to grow with 12,899 of the latest zero emission cars joining UK roads.

That represents an increase of 40.9 percent on the same month last year – and taking a 10.8 percent market share, up from 6.5 percent last year.

Overall however, manufacturers continue to suffer from the shortage of semiconductor chips and the lack of availability of wiring harnesses.

Many of the latter are made in parts of the Ukraine affected by the Russian invasion.

Elsewhere registrations of hybrids (HEVs) also rose by 18.3 percent and the number of new plug-in hybrid (PHEV) registrations decreased by a third.

As a result, electrified vehicles comprised 27.9 percent of all new car registrations during April.

The SMMT says the tough economic outlook and ongoing global uncertainties around the war in Ukraine have caused it to lower its expectations for whole-year sales in 2022.

It’s now suggesting the annual total will be 1.72m new cars, compared to the 1.89m it predicted in January.

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While this still represents a 4.5 percent rise on 2021, it highlights the effect the semiconductor shortage is still having on supply as well as anticipated impacts from rising living costs.

The outlook for plug-in vehicles also was downgraded with the forecast for BEV registrations now at 289,000 units, down from 307,000; and PHEVs at 144,000, down from 163,000.

HEVs also saw their outlook fall from 198,000 to 193,000.

This means that plug-in electric cars are now expected to account for a quarter of all registrations during the year, with BEVs alone comprising around one in six new cars on the road.

Mike Hawes, SMMT Chief Executive, said: “The worldwide semiconductor shortage continues to drag down the market, with global geopolitical issues threatening to undermine both supply and demand in the coming months.

“Manufacturers are doing everything they can to deliver the latest low and zero emission vehicles, and those considering purchase should look to place their orders now to benefit from incentives, low interest rates and reduced running costs.

“Accelerating the transformation of the new car market and the carbon savings demanded of road transport in such difficult times requires not just the resolution of supply issues, however, but a broader package of measures that encourages customer demand and addresses obstacles, the biggest of which remains charging anxiety.”

Meanwhile almost 100,000 fewer cars were built in the first three months of 2022 compared to last year in the UK.

The SMMT linked the decline to a global shortage of computer chips and rising energy costs for manufacturers.

In the first three months of this year, a total of 207,347 new cars were built in the UK, down from 306,558 in the same three months in 2021, when the Covid-19 pandemic created added pressures for manufacturers.

The closure of Honda’s plant in Swindon last year has been a major factor, and added to a large reduction in the number of cars exported to the US.

Exports to the US saw the greatest decrease last month and declined by 63.8 percent during March, while exports to the EU declined by 24.5 percent.

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