New car registrations have recorded their weakest March since 1998, before the UK went to two annual number plate changes, amid warnings the Ukraine crisis could make things even worse.
The final figures for the month from the Society of Motor Manufacturers and Traders (SMMT) show a 14.3% to 243,479 units, as supply chain shortages constrained deliveries.
But as expected, it was the best ever month for battery electric vehicles with 78.7% growth to 39,315 units, while all electrified vehicles account for one in three registrations.
The March decline means first-quarter registrations fell by 1.9% despite the rollback of pandemic rules.
The SMMT said around 20% of total annual registrations are usually recorded in March, so the result was massively disappointing for the sector and underscored the long-term impact the pandemic is wreaking on the industry.
Last year the shortage of microchips, and hence new cars, led to a surge in demand for used vehicles, leading to a boom in the prices of used cars and giving a boost to car dealers such as Caffyns, Lookers, Marshall Motor Holdings, Pendragon Group and Vertu Motors, as well as newcomers like Cazoo Group, Cinch and Motorway.com.
SMMT stats on todays March UK new car registration figures. IMO these low numbers are not too much of an issue for the Motor Retailers. They're able to sell new vehicles without discounting, are making bundles on Used vehicles & Aftersales remains their strongest profit line. https://t.co/ll4SxGnzj4 pic.twitter.com/dkM83lYjkD
— Tony Watson (@tonywatsonm) April 5, 2022
Mike Hawes, SMMT chief executive, said: "March is typically the biggest month of the year for the new car market, so this performance is deeply disappointing and lays bare the challenges ahead.
"While demand remains robust, this decline illustrates the severity of the global semiconductor shortage, as manufacturers strive to deliver the latest, lowest emission vehicles to eagerly awaiting customers.
"Placing orders now will be beneficial for those looking to take advantage of incentives and lower running costs for electric vehicles, especially as the Ukraine crisis could affect supply still further. With increasing household and business costs, government must do all it can to support consumers so that the growth of electric vehicles can be sustained and the UK’s ambitious net zero timetable delivered."
UBS also published the results of its sixth EV consumer survey, polling around 11,000 participants around the world, showing that even before Russia's invasion of Ukraine began, creating a new focus on energy sources and prices, 49% of consumers said they are likely to consider buying a fully electric car (BEV), up six percentage points on a year ago.
"With that, BEVs reach the territory of gasoline cars for the first time," UBS auto analysts said, adding that the results "suggest that the EV penetration curve ahead will be so steep that supply will remain the limiting factor for years to come, implying EV margin parity for the strongest executing OEMs".
This comes after the Resolution Foundation warned in February that 10mln households would miss out on lower costs from charging electric cars using cheaper overnight electricity as their homes do not have access to off-street parking or a personal garage.