Sales of new cars remain down by a quarter on pre-pandemic levels as the global shortage of computer chips limits supply. The Society of Motor Manufacturers and Traders (SMMT) said preliminary figures show the number of new cars registered in February was around 15 per cent higher than the same month last year when showrooms were closed due to coronavirus lockdowns.
But the total was around a quarter below February 2020, before the virus crisis affected new car sales. Registrations continue to be restricted by the global shortage of computer chips, which is limiting supply.
Ian Plummer, director at automotive classified advertising business Auto Trader, said there are “signs of pent-up demand that could really set the market on fire later this year”. He went on: “Speak to any manufacturer or motor retailer, and they’ll tell you that the market is red-hot and that their order books are full to bursting for months to come.
“Last month Auto Trader saw the volume of new car enquiries increase 44 per cent on the same period last month. The car industry’s well-documented issues with semi-conductor shortages have so far acted as a brake on the demand of an army of would-be buyers with Covid savings.
“But as production ramps up again that dam looks set to burst later this year as new deliveries pick up speed. Order books are rammed until at least September.”
The number of plug-in vehicles such as pure electrics and plug-in hybrids registered last month more than doubled compared with February 2021. Sales were up by around 125 per cent.
The SMMT urged the Government to reform VAT rules for electric vehicles (EV) charging as energy costs continue to soar. VAT on domestic electricity is 5% whereas motorists using on-street chargers must pay 20 per cent.
That means people whose homes do not have off-street parking pay four times as much VAT to recharge their EVs than those who can top up their batteries while parked on a drive or in a garage.
Confirmed registration figures will be published by the SMMT at 9am on Friday.
