UK sales rose 28% in June but chip supply shortages dampen recovery

UK new-car sales rose 28 percent in June but the market's recovery is being slowed by the global shortage of microchips, industry association SMMT said.

Registrations increased to 186,128 from 145,377 in the same month last year, the SMMT said in a statement on Monday.

The monthly performance was artificially lifted through comparison with June 2020, when the UK began to emerge from the first pandemic lockdown and showrooms in England opened up at the beginning of the month, the SMMT said.

The level remained down 16 percent on the 10-year average for June, the group said.

Sales of battery electric cars rose 123 percent to 19,842 in June for a 10.7 percent market share. Registrations of plug-in vehicles increased 146 percent to 12,139 for a 6.5 percent share of the market.

Private registrations were positive in June, up 22 percent but subdued compared to large fleets, which rose 34 percent, the SMMT said.

Total registrations for the second quarter fell short of industry expectations by about 9,000 units, partly because the global semiconductor shortage is limiting vehicle supply, the SMMT said. As a result, overall registrations for the first half are down 27 percent.

With the final phases of the UK's vaccine rollout well underway and confidence increasing, the automotive sector is now battling against vehicle supply challenges, SMMT CEO Mike Hawes said in the statement.

"The semiconductor shortages arising from COVID-constrained output globally are affecting vehicle production, disrupting supply on certain models and restricting the automotive recovery," he said.

"With the end of domestic restrictions later this month looking more likely, business and consumer optimism should improve further, fueling increased spending, especially as the industry looks towards September and advanced orders for the next plate change," Hawes added.

June winners and losers

The Tesla Model 3 was the best-selling car in June, followed by the Volkswagen Golf and Ford Puma.

VW was the top-selling brand, with sales up 57 percent to 19,454. No. 2 was Audi, with sales up 78 percent to 14,446. Ford was No. 3 with registrations up 5 percent to 14,234. BMW was No. 4 with sales up 34 percent to 14,227 and Toyota was No. 5, with a volume of 12,062, up 3 percent.