SMMT new car registrations: Disappointing volumes reflect supply limitations, but used and new car orders remain strong

Alison Ashley, partner and head of motor retail at RSM comments: ‘The headwinds facing the sector continue to disrupt the traditional ebbs and flows of new car registrations, including the usual September uplift as consumers look to secure the latest plate. It is unsurprising given those limitations that the 2021 stats show a year on year decrease on September 2020, which was the worst month since records began in 1999; but September 2021 volumes are still disappointing and reflect supply issues. Fortunately, registrations are only one piece of the retail picture and used cars and new car orders remain strong. Whilst new car orders will take some time to reflect in the registration statistics due to the microchip and supply chain disruption, dealers will be pleased to have a pipeline of orders as they head into winter and possible softening of demand and consumer confidence.’

Thomas Pugh, UK economist at RSM comments: ‘Today’s data is another indicator that consumer spending remained subdued in September and is another illustration of the impact that supply shortages are having on the economy. Indeed, the economic recovery seems to have stalled in Q3 as labour and product shortages took hold. And the combination of higher energy bills, tax rises and the withdrawal of the uplift to universal credit means that real household disposal income (RHDI) will take a hit next year. We have recently revised down our forecast for RHDI by 1% for 2022. This will weigh on consumers’ ability to spend on all goods and services, including new cars. 

‘Admittedly, households’ balance sheets are much healthier than before the pandemic as they have paid down debt and build up a savings pile of about £200bn. This would normally bode well for big ticket items such as cars, but consumers will want to be much more confident about the economic outlook before starting to take on debt again.’