INVESTIGATION
SHORT CIRCUIT? September’s new car sales fell off a cliff thanks to the global semiconductor crisis – and the light at the end of the tunnel is still a fair distance away…
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he UK has just seen its worst September for new car sales since the twice-yearly plate changes began in 1999. But while some of the slowdown in sales can be put down to economic uncertainty, the biggest factor affecting new car sales throughout the whole of 2021 has been availability – or rather, the lack thereof. For the first time in September there wasn’t a Ford in the country’s top 10 seller list, as the Blue Oval suffered worse than many of its competitors from a crisis that is affecting more than 160 industries. Among them, the global car industry is one of the hardest hit and is expected to lose over $210bn – circa £154bn – over a two-year period, according to US business news channel CNBC. As the supply of new cars dries up, it’s a far cry from a decade ago when airfields across the UK were full of unsold stock as a result of overproduction during the global economic crisis. The Society of Motor Manufacturers and Traders reported a ‘desperately disappointing September’ as new car registrations tanked by more than a third (34.4 per cent) to just 215,312 – a worse result than last September when Britain was still feeling the hardest impact of the coronavirus pandemic. It’s the ongoing shortage of semiconductor microchips that continues to affect vehicle availability the most, according to SMMT chief executive Mike Hawes. He said: ‘Despite strong demand for new vehicles over the summer, three successive months have been hit by stalled supply due to reduced semiconductor availability, especially from Asia. ‘Nevertheless, manufacturers are taking every measure possible to maintain deliveries and customers can expect attractive offers on a range of new vehicles.’ Although that strong consumer demand might be seen as a positive, the longer-term prognosis isn’t exactly pretty, with semiconductor supply issues projected to last until at least 2023, affected by further lockdown activity earlier this year in Malaysia, which supplies around 10 per cent of the world’s semiconductors – commonly found in car ECU, security and infotainment systems. IT and systems research company Gartner has projected a best-case scenario that sees semiconductor availability returning to normal at the end of 2022’s second quarter, or potentially the end of the same year, depending on market forces and global production capacity. ‘The shortage will severely disrupt the supply chain and will constrain the production of many electronic equipment types in 2021 and beyond,’ said Kanishka Chauhan, principal 10 | CarDealerMag.co.uk
Despite strong demand for new vehicles over the summer, three successive months have been hit by stalled supply due to reduced semiconductor availability, especially from Asia. SMMT chief executive Mike Hawes
