UK new car sales see weakest March since 1998

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© Reuters. FILE PHOTO: A view shows morning rush hour traffic, as the spread of the coronavirus disease (COVID-19) continues, in central London, Britain July 6, 2020. REUTERS/John Sibley
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(Reuters) – British new car registrations fell 14% to record the weakest March since 1998 as semiconductor shortages continued to hit car supplies, although demand for battery electric vehicles touched an all-time high, industry data showed on Tuesday.

Soaring inflation in Britain, made worse by rising fuel prices, could also hit demand for new cars, while the Russia-Ukraine conflict could further strain automotive supply chains, the Society of Motor Manufacturers and Traders (SMMT) said.

“Given (that) around 20% of total annual registrations are usually recorded in March, the result is massively disappointing for the sector and underscores the long-term impact the pandemic is wreaking on the industry,” the SMMT said in a statement.

A shortage of chips, arising from supply problems during the pandemic and soaring demand from consumer electronics, has severely hit the auto industry, with missing crucial parts hindering the production of new cars.

Battery electric vehicles (EVs), however, enjoyed their best-ever month, with registrations in March surpassing those for the whole of 2019.

The SMMT said 39,315 new zero-emission cars left dealerships last month, up 79% from a year earlier and accounting for nearly a sixth of the car market.

“There was already massive growth in this segment and, if anything, the demand for EVs 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.

The fall in UK new car sales, to 243,479 units in March, also impacted first-quarter numbers, with overall registrations for the first three months of 2022 falling 1.9%.