New number plate fails to boost March car sales

The UK's car industry saw its worst March for new car sales in 24 years last month, according to the latest figures.

Just 243,479 new cars were registered last month, new research from the Society of Motor Manufacturers (SMMT) suggests - down 14.3% on March 2021.

Falling car production has been blamed on an ongoing global shortage of computer chips.

But electric car sales are rising rapidly, the SMMT said.

Its chief executive, Mike Hawes, described the March figures as "deeply disappointing" overall though.

March typically marks a crucial month for the automotive industry, with buyers snapping up cars with the latest number plates.

"While demand remains robust, this decline illustrates the severity of the global semiconductor shortage, as manufacturers strive to deliver the latest, lowest emission vehicles to eagerly awaiting customers," Mr Hawes said.

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"Placing orders now will be beneficial for those looking to take advantage of incentives and lower running costs for electric vehicles, especially as the Ukraine crisis could affect supply still further," he pointed out.

Ongoing pandemic-related lockdowns have exacerbated shortages of semiconductors - or computer chips - which are critical components in modern cars and used in areas like emergency braking, airbags, entertainment systems and navigation.

A modern car can use between 1,500 and 3,000 semiconductors.

David Borlad, automotive leader and EY UK & Ireland, said that the industry is struggling with uncertainty around the war in Ukraine making supply chain problems worse.

He suggested that it is leading to "record unfulfilled order books; while used cars continued to fill the void due to unavailability of new cars".

Electric car boost

March did mark the best ever month for battery electric car sales though, with registrations up almost 79% to 39,315, outstripping the total number sold in 2019 as a whole.

Other analysts pointed out that climate-conscious consumers had already been opting for electric vehicles in recent years.

"The demand for electric vehicles is now even stronger as prices at the pumps rise on the back of the Ukraine crisis," said Ian Plummer, director at online car marketplace Auto Trader.

For the first time ever, electric cars made up the two best-seller spots last month, with Tesla coming out on top.

The sale of new petrol and diesel cars will be banned in the UK from 2030 in a push to meet the government's net zero targets.

But the SMMT warned: "With increasing household and business costs, government must do all it can to support consumers so that the growth of electric vehicles can be sustained and the UK's ambitious net zero timetable delivered."

In December, the maximum value of a plug-in car grant, which is meant to bring down the cost of an electric car, was reduced from £2,500 to £1,500, and the number of eligible models was also narrowed down.