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Semiconductor shortages and the cost of living squeeze have hit UK car sales last month, despite more motorists turning to electric vehicles.
British new car registrations fell about 14% in March from a year earlier, despite the lifting of Covid-19 restrictions last month, preliminary industry data released this morning showed.
That would take registrations to below 250,000, a long way shy of the March average of 450,000 in the decade before the pandemic.
March is usually the biggest month for the auto sector, because the ‘new’ number plates come in. But the pressures on household finances will mean some families will put off getting a shiny new car, as rising food, fuel and energy costs eat into budgets.
Chip shortages continue to hit the sector too, as supply chains continue to struggle after two years of pandemic disruption. UK car production fell 41% year-on-year in February, data last month showed.
As well as struggling to source chips, manufacturers have also been hit by soaring metal costs as the war in Ukraine pushed commodity prices sharply higher.
UK car sales had risen year-on-year in January and February (compared to weak sales in 2021, when the pandemic was hitting the sector), so March’s fall reverses that trend.
EV vehicles are in growing demand, though, as motorists shun diesel.
Today’s report is expected to show that March was the best ever month for sales of battery electric vehicles, with registrations last month surpassing those for the whole of 2019.
The SMMT will release the final figures for March at 9am.
Also coming up today
The latest PMI surveys will show how firms in the UK, eurozone and US fared last month, in the face of rising energy and commodity prices and the ongoing pandemic.
Oil prices are rising, as the US and France call for a significant escalation of sanctions against Russia following the shocking discovery of hundreds of bodies of civilians in towns surrounding Kyiv. Brent crude has gained 1.5% this morning to around $109.
- 9am BST: UK car sales for March
- 9am BST: Eurozone services sector PMI for March (final reading)
- 9.30am BST: UK services sector PMI for March (final reading)
- 1.30pm BST: US trade report for February
- 3pm GMT: US services sector PMI for March (final reading)