July 2021 was a frustrating month for the UK car industry. Easing of Covid-19 restrictions meant that all dealerships across the country were able to trade at close to maximum capacity – but they couldn’t get enough cars.
A shortage of semiconductors has been playing havoc across the global car industry in recent months. These tiny electronic components are critical to the computers that run every aspect of a modern car, and every bit as essential as a steering wheel.
The current shortage is a result of Covid production stoppages in the electronics supply chain, and is expected to continue for at least the rest of this year. Last week, BMW reported that it has about 10,000 cars that it can’t finish building while it awaits supply of semiconductors. Every car manufacturer is affected, although some worse than others as we will see below.
Fleet registrations down more than consumer sales
Year-on-year analysis of the monthly SMMT registration data is currently pretty pointless due to the mess of lockdowns, stoppages and now production shortages that have affected the world since the start of 2020. July last year was also a particularly strong month as the UK had recently re-opened after the first Covid lockdown last spring, which makes year-on-year data look worse.
Overall, the new car market was down nearly 30% on the same month last year. Although that number may not be particularly relevant, the breakdowns within the overall figure are interesting. Fleet registrations were hit harder than private registrations (down 33% and 25%, respectively), which is a reversal of the last few months were fleet sales have been much stronger.
Whether this is a temporary blip associated with supply problems or an indication that large fleets have now caught up with delayed orders from the last year remains to be seen.
Diesels down, electrics up
Yet again, diesel’s market share plumbed new depths in July, falling to less than 13%. Any hopes the industry had that diesel sales would level off seem long gone as the oily fuel continues its slide from being the dominant player in UK new car sales to a niche choice.
Electrified cars hit new highs (also yet again), as more and more electric and plug-in hybrid models go on sale. Regular hybrid sales are also continuing to grow, with a combination of existing models doing very well (Toyota Yaris) and a growing number of hybrid models now available.
Petrol cars remain by far the dominant choice, although their market share is also gradually falling against the growth of electrified vehicles.
Good month, bad month
So far, the Volkswagen Group seems to be riding out the semiconductor crisis better than most other car manufacturers. VW remains the biggest-selling brand, but only just ahead of premium sibling Audi, which again comfortably out-sold traditional market leader Ford. SEAT and Skoda also performed well ahead of the overall market.
Ford has had a rough ride over the last few months, and July was another struggle. Against an overall market that was down 30%, Ford sales were down by more than 54%. Vauxhall had been taking advantage of its traditional rival’s struggles, but in July its sales were also down 49% as the Corsa – 2021’s best-selling car to date – fell out of the top ten altogether (see below). Among other volume brands, Renault had a horrendous month (down 80%) and Peugeot was pretty awful as well (down 59%).
It was a good month for Abarth, Alpine, Audi, DS Automobiles, Fiat, Honda, Hyundai, Jeep, Kia, Lexus, Maserati, Mazda, MG, SEAT, Skoda, Subaru, Suzuki, Toyota, Volkswagen and Volvo – all of these brands outperformed the overall market by at least 10%.
On the gloomier side of the street, life wasn’t as peachy for Citroën, Ford, Jaguar, Land Rover, Mitsubishi, Nissan, Peugeot, Porsche, Renault, SsangYong and Vauxhall – all of these brands were at least 10% worse than the overall market result.
Polo season in full swing
The Volkswagen Polo was the UK’s best-selling car in July, where the top ten reflected the supply difficulties that the industry is facing. This year’s top-selling car to date, the Vauxhall Corsa, disappeared from the top ten altogether.
The Polo and the Toyota Yaris seemed to be the main beneficiaries of poor months for the Corsa and the Ford Fiesta, while the Audi A3 improved as the Mercedes-Benz A-Class struggled. It was also a good month for the outgoing Kia Sportage, potentially taking sales from the Nissan Qashqai as supplies of the current Qashqai run out ahead of the all-new model’s upcoming launch.
We’ll have our usual analysis of the top ten in the next few days.