By on October 5, 2021

Despite manufacturers still managing to turn a profit, the automotive sector hasn’t been in the best of health these last few years. Growth appears to have plateaued in most Western nations, encouraging companies to cater this business toward other markets, supply chains have also been negatively impacted by the pandemic — with semiconductor shortages hindering production schedules on a scale we’ve not seen since the Great Recession.

It’s a bad situation and rumored to get worse if the warning cries of economists are to be believed. But there’s also mounting evidence to support their claims. The Society of Motor Manufacturers and Traders (SMMT) recently reported that vehicle registrations in the United Kingdom fell by roughly 35 percent in September vs the same timeframe in 2020. This is relevant because the month typically represents the second-busiest period for the country and numbers were already low due to production stops created by coronavirus lockdowns. 

Stacked against the region’s 10-year average, UK September sales are actually down by almost 45 percent.

“This is a desperately disappointing September and further evidence of the ongoing impact of the Covid pandemic on the sector. Despite strong demand for new vehicles over the summer, three successive months have been hit by stalled supply due to reduced semiconductor availability, especially from Asia,” Mike Hawes, SMMT chief executive, told the Financial Times this week.

From FT:

Dealers reported 215,312 new vehicles registrations last month, 34 per cent down on September last year — when sales were also hit hard by the coronavirus lockdown — and an almost 45 per drop on the pre-pandemic 10-year average. The sales figure is the lowest since the “two-plate” system was introduced in 1999.

Like other sectors, the auto industry, which was already faced with uncertainty around Brexit, was hit hard by pandemic shutdowns and economic uncertainty.

It has continued to struggle to meet pent-up demand as the economy reopened due to a global shortage of computer chips.

Just about everyone expected September to be a sigh of relief for the industry and proof that car sales were rebounding. But automakers have spent the last couple of months reporting significant sales declines and attempting to be careful where they place the blame. Consumers are allegedly not the problem and have even shown a willingness to pay exorbitant prices for both new and used automobiles.

The industry has instead continued blaming the semiconductor shortage while suggesting buyers are eager to jump into the pool with more savings at the ready than usual. Though when your clientele is flush with cash and still not buying, the finger has to be pointed back at the manufacturer or a hectic, uncertain economy. At least that seems to be the case in the United Kingdom and almost assuredly an explanation that carries over for North America.

But the longer this drags on, the more it appears to be a universal issue.

“After a strong spring selling season, the supply situation has worsened precipitously and is dragging sales down with it,” Cox Automotive Senior Economist Charlie Chesbrough stated on Monday. “Available supply on [American] dealer lots is now 58 [percent] lower than last September, down nearly 1.4 million units.”

One debatably bright spot from the SMMT assessment, however, was an increased take rate of electric vehicles. It reported that over 32,000 new battery-electric cars were registered inside the United Kingdom last month, noting it as a record. Although EVs technically require more semiconductor chips than most modern internal-combustion vehicles — making yours truly wonder how relevant the global chip shortage actually is in the grand scheme of things.

[Image: Gretchen Gunda Enger/Shutterstock]

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32 Comments on “UK Vehicle Registrations Fall Into Bottomless Pit...”


  • avatar
    gasser

    Some of the sales decline may be due to lagging inventory related to chip shortages. I think that more of the sales decline is related to the general post-Brexit economy. Empty grocery store shelves, falling exports, rising prices on imports and lastly gas stations without fuel, does not put anyone in the mood to buy a new vehicle.

    • 0 avatar
      Mike A

      True, but the empty shelves meme is a bit of a fallacy. My sore at couldn’t buy lemonade one day but could get everything g else. First world problems. As for the petroleum shortage, it was panic buying via media reports that made that much worse and there is plenty of fuel. It just needs to be distributed.

      I thought TTAC would have US q3 sales.

    • 0 avatar
      Lou_BC

      Brexit is a bigger factor in buyer reluctance than the pandemic.

      • 0 avatar

        It is the shortage of lorry drivers that contributes most to petrol shortages Why there are shortage of lorry drivers – may be related to Brexit or may be not – no one knows without investigation but the same (shortage of truck drivers) at US ports, certainly on the West coast where you can observe long lines of unloaded container ships from China.

        • 0 avatar
          Lou_BC

          There’s a shortage of truck drivers everywhere.

          • 0 avatar
            stuki

            Special case of “shortage of anyone competent to do anything” everywhere. It’s not The Age of Incompetence for nothing.

            But hey, “we” can print money and pretend childish hype, and mold in the walls of decaying houses, somehow create value.

          • 0 avatar
            chuckrs

            In the US, Blundering Biden has weaponized OSHA against vax hesitation with whopping huge fines on large corporations if their employees don’t get vaxxed. Truckers can be a fractious lot – this is likely to result in firing/quitting by those unvaxxed working in big corps. More stress on supply chains while those people hook up with small trucking outfits instead. Heckuva a job, Sloppy Joe.

            Oh, and Lets Go, Brandon.

          • 0 avatar
            Lou_BC

            “this is likely to result in firing/quitting by those unvaxxed working in big corps.’

            @chuckrs – there was a shortage before COVID hit. Read @conundrum’s post. This is occurring in England. They kicked out a million workers. But hey, why let the facts get in the way of a rant!

          • 0 avatar

            The problem with UK is that it is an island what makes it difficult for migrant work-force to invade. We in USA are blessed with US/Mexico border.

  • avatar
    SCE to AUX

    “Although EVs technically require more semiconductor chips than most modern internal-combustion vehicles”

    I don’t think that’s true. EVs have all the same options, features, and controls as any other car. They don’t need an engine ECU attached to two dozen sensors, but of course they need something to manage the motor and battery. My guess is it’s a wash.

    Record EV sales are likely due to their growing popularity, incentives, and regulation-induced availability. Tesla’s production schedule currently favors high-margin performance variants, because even they can’t build everything they want. For example, sometimes a Plaid is in stock, but a regular Model S is out to April.

    As for the chip shortage – it is real – but that’s not the only shortage in town. Resins, adhesives, and related products (like wire, plastics, glue, etc) are also hard to get, and with long lead times.

  • avatar
    sgeffe

    Slightly off-topic, but the CreditKarma car valuation thingy, which updates once per month, is showing an increase again! Don’t know if they base that on KBB or another metric. But apparently, things are trending toward the worse again.

    • 0 avatar
      FreedMike

      I just bought a 14-year-old car for my kid. Took me months to find something in good shape that wasn’t hilariously, acid-trip overpriced.

      I can confirm the used car market is a total dumpster fire right now.

  • avatar
    settsu

    Those pining for GM to reintroduce Quadrasteer will be thrilled to know that they (effectively) are on the new electric Hummer: https://youtu.be/0sD59ciKcs4?t=349

    Your affection for all wheel steering can be rekindled for a measly six figures…

  • avatar
    conundrum

    When the Brits, mainly the English but certainly not the Scots, decided that yes indeed foreigners are smelly, and well, foreign, the nation voted to leave the EU. They were then surprised to discover on exit negotiations that the continentals didn’t seem to be playing ball and giving them the exact same deal outside the EU as they had within. Surely those damn foreigners knew the British are super special folk compared to them and deserved special treatment? That was the ruling Tory Party outlook. After a lot of this kind of blinkered nonsense, Boris the Bozo, Prime Minister, and only world leader to trim his hair with deft strokes of his lawn shears, finally just up and left with what he was offered, claiming triumph! Over a million EU citizens on work permits, who had been doing all the jobs that native Brits didn’t want, were sent back home to rot. Many of these people drove semis and delivery vans, so now the UK is 100,000 truck drivers short. Brilliant thinking by the aristos as usual.

    Over and over and over again, car manufacturers with plants in the UK, like Toyota, PSA, Honda, Nissan, BMW/MINI and JLR said that leaving the EU the way the Tories intended to would lead to a complete disruption of just-in-time parts deliveries from Europe because of the mountainous paperwork for import that would be required. But, hey, if you’ve got a BA in Greek Drama like Boris, manufacturing concerns do not exist, and it’s all a bit pleb-like worrying about jobs where people get actual dirt under their fingernails. Ewww.

    Now the paperwork for goods coming in, and for exports going out, is so bad, small British companies are going bust. 78 pages to export specialty cheese to the EU, but just Parcel Post and a green declaration label to mail to anywhere else in the world. Landowners and financial types prop up the Tory Party and Boris’s lunacy, and what they know about real business could be engraved on the head of a pin, and is so declasse anyway, who’d want to? Complete dunderheads, but that’s privilege for you. Honda is winding down its UK operations — I mean why talk to the government fools who claim to be running the place?

    So now, nobody native wants the 1,000,000 low-paying jobs the Europeans used to do, there’s milk, bread and shortages of fresh vegetable in supermarkets, natural gas prices are going through the roof (and that’s what Brits use to cook and heat their homes with), electricity distribution companies are going broke. The place is a total fiasco with the world’s biggest Dumb Bunny running the place, oblivious as usual and talking absolute balderdash.

    No wonder nobody over there wants to buy a damn car while this horsesh!te is going on. No turkeys for Xmas is the latest thing. Unwise beyond his years, Boris the Bozo has offered 5,000 special visas to European truck drivers who used to work in the UK before they were ejected as foreigners, to come back for three months, enjoy a pint of British beer, and to be paid in the world’s supreme currency, the Pound Sterling. The doors on British consulates throughout the Continent have been torn off by people storming the places to get that visa. Not. Who needs a three month gig in a place with no fuel and no food and no beer? 5,000 truck drivers is 95,000 short of the need, if anyone wanted to take the Brits up on a lousy deal anyway.

    I was born in the UK, came to Canada at 11 with family, and went back for graduate work for five years, so I have a bit of a clue about the mindset there. Out-of-touch and xenophobic doesn’t begin to describe it.

    Now they’ve got Army people delivering gas and diesel to retail stations with Army tankers. The place is falling apart, as so many business people warned would happen before the final “deal” ha ha, was struck. And Boris hasn’t got a damn clue how to fix it. Debating intellectually from a bottomless pit of artsy-fartsy classical training is his forte. The real world? Not a damn clue.

    ost

    • 0 avatar
      Lou_BC

      @conundrum – The upper class still believes that the British Empire still exists and the world will subserviently bow to their will. Hubris on an epic scale. It’s just lazy or cognitive dissonance at it’s finest to blame the pandemic for their self-inflicted plight.

      • 0 avatar
        Nick_515

        conundrum, THANK YOU.

        We have a family member who works in the UK and confirms much of what you say. The bottom has not given out just yet, but it might. Actually, it has but in uneven ways, so not quite front page yet.

        Lou, the upper class, including despicable Boris and his ilk will always land ok no matter what. While Posky here will write articles on ‘freedom’ etc. I still remember B&B comments on how UK voted for its independence. My friends got duped by despicable Boris, thought “the millions we’re giving EU” will prop up NHS. Then they didn’t have enough nurses for the flu season, let alone the pandemic.

        • 0 avatar
          Mike A

          Yes I just posted large profits and have kept the shelves stocked. The project fear runs deep with some even though the predictions of doom from 2016 did not occur. There are shortages everywhere and Brexit occurred over 18 months ago and therefore lower sales in September 2021 are not directly linked.

    • 0 avatar
      SPPPP

      Certainly Brexit is a bit of a SNAFU (as many predicted). But if the result is a mountain of paperwork for GB-EU transfers, and a million unemployed people flooding back into Europe (as you say), then isn’t the problem partly of the EU’s making as well?

      It seems like Brexit got traction partly because of the perception of the EU as a psycho girlfriend that would burn the house down if you try to leave. The situation as it is hasn’t exactly disproven that.

      • 0 avatar
        Lou_BC

        @SPPPP – “EU as a psycho girlfriend”.

        England tried to be the bully on the block. England’s GDP ranks 3rd behind Germany and France and Italy is a close 4th. The EU has no need to play nice with England. Leaving the EU means going back to pre-EU trade methods since there wasn’t a real trade deal that went with BREXIT.

        Bozo Boris and the inbred aristocracy brought this upon themselves.

        • 0 avatar
          SPPPP

          @Lou_BC:

          Well, yes, actions have consequences. At the same time, maybe the people in England will look back at some point and be glad they chose their own path. Nationalism has a dark side, but giving up national sovereignty bit by bit can be dangerous too. Independence is something that people fought and died for, and it is hard to give up.

          • 0 avatar
            Lou_BC

            @SPPPP – We are all interdependent. That is different than being dependent. Working together doesn’t mean one has to give up being independence or sovereignty. England does not have the resources to be fully self-sufficient. The EU losing England as a partner isn’t a big deal to them collectively.

    • 0 avatar
      FreedMike

      I wonder how many British folks would like a Brexit do-over right now.

      I’m also beginning to think this is the right time to strengthen trade ties with the UK. They’re going to be looking for someone to help them out of this mess, and it’s either going to be us…or China.

  • avatar
    BSttac

    That’s what happens when you force everyone to buy a more expensive EV. Europe automotive sector will continue to dwindle due to its crazy regulations which now appear to be what Biden wants as well since he has stick in batteries. Its coming

  • avatar
    brn

    Another reason for registrations being down…

    Tickets for failing to register disproportionally impact people of color, so some cities (e.g. Minneapolis) are not allowing the police to enforce registration issues. If no one is enforcing registrations, why register?

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