David Borland, EY UK & Ireland Automotive Leader, comments on SMMT new car registration figures for October 2022:
“October 2022 continued the growth of the last two months with another year-on year-improvement for registrations. SMMT data showed that over 134,000 new vehicles were registered in the month. Although this was a 26.4% improvement over sales figures in 2021, they were still behind when compared to pre-Covid periods in 2019 which was over 6% lower. The trilemma of supply chain pressures, rising inflation and high energy prices continued to impact business in the UK and the car industry was not exempt. In terms of supply, the latest production figures saw a 6% decrease in September for UK manufacturing that bucked the recent trend of growth.”
Manu Varghese, from EY’s UK & Ireland Advanced Manufacturing & Mobility team, adds:
“In addition to ensuring energy security and affordability, the industry also needs to make this clean and green to fulfil its responsibility of supporting the UK’s zero emission targets. With just over seven years before the sales ban for new petrol and diesel cars, the country needs incentives, governmental support and a robust charging network to increase uptake of EVs. We had an important milestone recently with Britain’s millionth plug in electric car reaching the road. In October, registrations of pure battery vehicles increased by almost a quarter, resulting in a market share of almost 15%, or 1 in 5 when you factor in plug in hybrids. The UK will be paying close attention to the transition on the continent following the agreement by the European Commission, Parliament and Council to reduce CO2 emissions from cars and vans reduced by 100% by 2035, in effect banning the sale of traditional internal combustion engine vehicles.
“Several OEMs and dealer groups announced mostly positive quarterly financial results primarily driven by continued low supply and favourable pricing. However, despite the seemingly good news, the industry continued to reel under supply chain issues, with one British car maker facing order backlogs in excess of 200,000 vehicles.
“A global OEM also abandoned its partnership on autonomous vehicles, a demonstration of the continual need to balance short and long terms goals with a finite capital allocation. In the critical area of infrastructure, a charge point operator and mainstream supermarket ended free charging from this month. This is another factor in the ever more dynamic total cost of ownership conundrum that consumers are balancing. No part of the ecosystem is immune to the challenges we all face.
Look to the future
“Despite consecutive months of manufacturing growth, sustained losses from global supply shortages, continue to disrupt the industry. Also, the current political uncertainty in the country has not helped the industry during these difficult times when the economy and the industry require long-term stability and a workable roadmap to recovery.
“There is no denying that the industry continues to be challenged from multiple angles in the most perfect of perfect storms. To be sustainable, profitable and attract new investment, the industry needs stability, a committed net zero plan and the ability to tackle skill shortages.”