New car market up 28% in June

Demand for new cars grew 28% in June, new figures show.

Some 186,128 new cars were registered in the UK last month, the Society of Motor Manufacturers and Traders (SMMT) said.

But the performance was “artificially lifted” as it is in comparison with June 2020, when the UK was still emerging from the first coronavirus lockdown, according to the industry body.

Last month represented a 16.4% decline compared with average June totals between 2010 and 2019.

The recovery of the market has been squeezed by the global shortage of computer chips, which is limiting supply.

SMMT chief executive Mike Hawes said: “With the final phases of the UK’s vaccine rollout well under way and confidence increasing, the automotive sector is now battling against a ‘long Covid’ of vehicle supply challenges.

“The semiconductor shortages arising from Covid-constrained output globally are affecting vehicle production, disrupting supply on certain models and restricting the automotive recovery.

“However, rebuilding for the next decade is now well under way, with investment in local battery production beginning and a raft of new electrified models in showrooms.

“With the end of domestic restrictions later this month looking more likely, business and consumer optimism should improve further, fuelling increased spending, especially as the industry looks towards September and advanced orders for the next plate change.”

The electric Tesla Model 3 was the most popular new car in June, with 5,468 registrations.

Battery electric and plug-in hybrids accounted for 17.2% of the new car market.

Karen Johnson, head of retail and wholesale at Barclays Corporate Banking, said: “The closure of non-essential retail during the pandemic created plenty of pent-up demand in the UK vehicle market, which has boosted sales in recent months.

“However, whilst the latest year-on-year growth figures remain positive, industry figures will be preparing themselves for the eventual end of this post-lockdown sales boost.”