Press release

5 Oct 2021 London, GB

The September new registration plate fails to lift auto sales blues

David Borland, EY UK & Ireland Automotive Leader, comments on SMMT new car registration figures for September

Press contact
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 September:

“Whilst navigating the fuel crisis, the ongoing semi-conductor and supply chain issues continue to hamper the industry, with many manufacturers around the world continuing to idle plants or reduce shifts. In the UK, September is traditionally the second strongest month in the year with the ‘new plate’, but it was 34.4% down on the prior year, with just 215,000 new car registrations. This was the lowest since 1998 and well below the five-year average of 380,000 registrations the industry was used to seeing in the pre-pandemic era.”

EV sales charge ahead

“The rise of electric vehicles continues around the globe, with a significant movement in Europe, where EV sales overtook diesel for the first time in August. In the UK, that trend continued in September, and BEV & PHEV vehicles outperformed the rest of the sector, with increases of 49% and 11% respectively over September 2020, resulting in a combined plug in share of 21.6% for September. The UK government is supporting the transition with announced plans to install over 25,000 publicly available charging devices and over 170,000 domestic and workplace charge points across the UK. Additionally, the UK Government announced that motorway and major ‘A road’ service area operators will be eligible to apply for a rapid charging fund - a £950 million fund to future-proof electrical capacity. With products coming to the market at pace, it is critical that the right infrastructure receives investment and is deployed to enable the ecosystem to support consumer needs.”

Supply chain continues to hamper recovery 

Manu Varghese, from EY’s UK & Ireland Advanced Manufacturing & Mobility Team: “Beyond the well-publicised semi-conductor shortage, the industry is struggling with rising prices for critical components such as steel and resin. Steel prices have increased by almost 200% in the past 12 months. Like lumber, resin and semi-conductors, the steel industry did not predict the switch in consumption patterns that COVID-19 brought. With steel heavy industries like oil and gas seeing high demand right now as the economy reopens, the shortage (and the high prices) are expected to last well into 2022 posing further challenges to automotive, both manufacturing and retail. The semi-conductor shortage has been a major contributor to falling UK car production figures and has also resulted in rising order banks into hundreds of thousands.”

Downbeat prediction for the rest of 2021

“Despite the decline of new car sales, used cars continue to ride the performance wave, with reports of prices increasing on average by more than 16% so far in 2021, and some models attracting higher prices than new car equivalents. This is providing much-needed opportunity for the sector, but with the furlough scheme ending in September and the Government’s decision to taper and end COVID-19 support measures, the industry is expected to face a liquidity crunch that was held back whilst support measures were in place. Actions such as assessing alternate financing options and winding up existing debt will be at the forefront of every CFO’s mind.”

De-risking the future

“The trend for partnerships continues in the sector, with companies joining forces to reduce investment required for new products & services on platforms, batteries, autonomy, connected services, and increasingly the circular economy. This balances the financial risk, but the impact on intellectual property ownership for new technology cannot be underestimated or forgotten."

"Supply, demand and regulation are the key pillars for the future success of the industry. In the latest research from EY, we highlight the readiness of markets against multiple dimensions in these three key areas.”