Weakest UK August car sales in 13 years amid supply chain shortages

Chip crisis hampers production of new vehicles at firms worldwide including VW and Toyota

Last modified on Mon 6 Sep 2021 05.29 EDT

Sales of new cars slumped by more than a fifth last month to their lowest August level in eight years, as the global shortage of semiconductors continues to hurt production across the automotive industry.

The Society of Motor Manufacturers and Traders (SMMT) said that just over 68,000 new cars were registered in the UK last month, a 22% fall compared with August last year.

While demand in August is typically weaker than other months, with many buyers holding off for the new number plate change in September, the SMMT said the chip shortage is affecting vehicle production.

“While August is normally one of the quietest months for UK new car registrations these figures are still disappointing, albeit not surprising,” said Mike Hawes, the chief executive of the SMMT. “The global shortage of semiconductors has affected UK, and indeed global, car production volumes so new car registrations will inevitably be undermined.”

The industry body said that over the first eight months of the year sales were up 20% compared with 2020, when dealers and factories were closed for months, but still 25% below average pre-pandemic sales levels.

Hawes called on the government to continue with support measures to help the embattled British automotive industry, which is struggling to recover.

“Government can help by continuing the supportive Covid measures in place currently, especially the furlough scheme, which has proved invaluable to so many businesses,” he said.

The slump in August follows a 29.5% year-on-year fall in sales in July, the weakest level of sales for that month since 1998, when the “pingdemic” of people self-isolating also affected sales.

Demand could also have been affected by more people shifting to hybrid working patterns, and the dip in UK consumer confidence in August.

Last August, car dealers reported a sales boost after reopening after the first coronavirus lockdown. But this year supply chain issues are affecting output with production in June slumping to the lowest level in almost 70 years for that month.

Last month, Volkswagen and Toyota both warned of production cuts because of the global shortage in semiconductors. Last week, Volvo warned that sales could fall in the second half of this year after it was forced to cut production because of shortages of materials.

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