Press release

6 Jul 2021 London, GB

SMMT June UK car sales – EY comments

SMMT June UK car sales – EY comments

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Adam Holden

Senior Manager, Media Relations, Ernst & Young LLP

Passionate media relations and public relations professional helping to provide insight and clarity to complex business issues. Husband and father to twin boys, and a golden retriever.

Related topics Automotive
David Borland, EY UK & Ireland Automotive Leader, comments on SMMT new car registration figures for June:
As the Euros heat up, the auto recovery remains lukewarm

“In June 2020, dealers had started to reopen and sales recovered from the first lockdown lows of March, April and May. Roll forward one year, and June 2021 recorded new car sales of just over 186,000 units, a 28% rise.   That said, however, we must continue to treat the year-on-year comparisons with caution, as sales are down almost 17% when compared to the same pre pandemic month, in 2019.  

Supply woes continue

“Whilst demand is recovering, the supply challenges continue, with manufacturers having to idle plants around the globe. The shortage of new vehicles as a result of reduced production during the pandemic and current supply challenges is also having a downstream impact on used cars, with high demand and low supply resulting in high prices and residual values. This is a critical part of the industry, with used cars typically outselling new by 4:1, and dealers releasing stronger forecasts for the year. 

Charge me up

“There have been several significant announcements that impact the movement to electrified vehicles, with long-term decisions on vehicle allocation and gigafactories being announced in the UK, but also other European markets and the US. The convergence of sectors continues as tie ups with energy, infrastructure and automotive companies have also been announced. Similar partnerships are also being put in place in aerospace, highlighting the truly cross sector nature of the energy transition. 

“In June, the combined market share for battery electric and plug in hybrids in the UK was 17.2%, which is almost double the same month last year. The same two-fold increase is also seen with year to date comparisons - 14.5% vs 7.7% last year. The Tesla model 3 was the best selling car in June, and despite the various challenges manufacturers are facing, they managed to achieve record Q2 production and delivery volumes.  

The road ahead

At a macro level, the economic outlook is improving, with business investment forecast to grow 7.1% in 2021 and 10.5% in 2022. Interestingly, the 2020 decline in business investment was smaller than seen during the 2008-9 financial crisis – and businesses enter the recovery with £129.5bn extra to invest. This is across all sectors, transport, education, IT and communications, real estate, and health. You can read more in the latest EY ITEM Club Special Report on Business Investment, here.

“With ‘freedom day’ looming, strengthening of the economy, consumer confidence and spending, we expect the market to continue its recovery throughout 2021 but it will no doubt be a bumpy ride.”