SMMT expects UK car sales to remain sluggish

The British Association of Automakers and Traders (SMMT) said on Thursday that the global shortage of semiconductor chips will continue to affect the sales performance of the UK car market this year through 2023.

Commenting on the impact of chip shortages on sales, Mike Hawes, CEO of SMMT, said: "After a bad year, this year is still not a good year. ”

It is understood that chips are widely used in various fields from brake sensors and power steering systems to entertainment systems, however, the shortage of chips has led to production cuts or production suspensions by automakers around the world, pushing up the price of new and used cars at a time of strong consumer demand.

Hawes says the average vehicle requires 1,500 to 3,000 semiconductor chips. "We believe demand is still there and it's strong, but there's a general consensus that chip shortages will continue to impact the market in 2022 and will continue into 2023."

Previously, susquehanna Financial Group's research data showed that the chip delivery cycle in December last year increased by 6 days compared to last November, about 25.8 weeks, which is the longest delivery time since the company began tracking the data in 2017. Prior to the recent surge in COVID-19 cases, SMMT forecasts UK car sales of 1.96 million units in 2022, down from about 2.3 million under normal circumstances.

In addition, the UK government plans to ban the sale of new petrol and diesel cars from 2030, SMMT said that more work needs to be done to reduce the price of electric vehicles and improve charging infrastructure, especially in street charging. Hawes said car cost and charging issues are "the biggest barriers people can consider buying an electric car."

SMMT said that about one-sixth of NEW CAR sales in the UK in 2021 will be pure electric vehicles or plug-in hybrids, of which sales of pure electric vehicles account for 11.6% of total sales, exceeding the cumulative sales from 2016 to 2020 (in December last year, pure electric vehicles accounted for about a quarter of UK car sales); Plug-in hybrid vehicles accounted for 8.9% of sales. Total new car registrations rose slightly by 1 percentage point to 1.65 million units, compared to 1.63 million units in 2020.