September new registrations fall - fuelled by shortages 

Torbay Weekly

Although the new car registrations for September show a drop of 35 per cent on last year, these numbers are mostly caused by shortages.

The private market was hit less than the fleet side as manufacturers reduced offers and delayed deliveries of large fleet orders to maximise profits by prioritising private sales.

This market was down around 25 per cent whereas fleet sales were over 45 per cent less.

The semi-conductor supply is the main issue but there continue to be other raw material shortages adding to the problem.

Brexit is also taking partial blame with difficulties in recruiting new workers as demand increases and Covid cases fall.

Manufacturers deliver most new vehicles by road so they have also been affected by the lack of delivery drivers.

However, at this time most manufacturers are heavily involved in launching and preparing to launch new electric products.

Sales of electric vehicles continue to rise and the Tesla 3 was the best-selling car in last month’s falling market.

Business users are taking advantage of the reduced benefit in kind applicable to electric cars as the Government pushes to eliminate sales of combustion engines.

China sold more than 1.3 million electric vehicles in 2020, which is around 40 per cent of the world’s total electric sales and we could soon be seeing some of their well-known brands on sale in the UK.

At the same time, world car manufacturers like Ford and Volkswagen are hoping to sell their electric products in China.

Later this month Rishi Sunak will present his Budget which has two major objectives - to get the economy back on track and find the income to pay off the Coronavirus debt at the same time.

The changes to National Insurance payments are going to help the NHS provide the services we all want and need but more taxation is likely.

He may well take the opportunity to penalise diesel car owners and continue to incentivise drivers to move to electric cars.

More cities are looking at congestion charges with the same motive being the main reason and further grants are likely to be given to local councils to provide additional charging facilities.

In spite of this, orders taken in September for both new cars and commercial vehicles has been encouraging with buyers understanding and accepting they may not see their new purchase until next year.

There has been some concern that additional costs will drive up prices but those who are familiar with using a lease scheme to access their vehicle will hope the monthly increases will broadly fall in line with inflation.

There is a return to the future introduction of autonomous cars and the elimination of safety concerns will be a necessary condition of seeing these cars on our roads.

Manufacturers will need to show there is less likelihood of accidents and deaths with these vehicles than those with drivers.

Businesses too, will be looking at whether deliveries can be made with resulting savings.

New technology and better safety and information will ensure new vehicle purchases will return to growth in 2022.

Stay safe and keep smiling. I look forward to next week.