New car registration data suggests that in July 2021 registrations declined by 29.5%, a figure of 123,296 units. This reduction was exaggerated in comparison to July 2020, when there was a substantial increase in registrations. This difference was caused by a full month of as dealers had just reopened, following the first lock down in 2020. Effectively giving them a full month of trading.
In July, all new car segments were in decline. The UK’s most popular type of vehicle remains the supermini, followed by the lower medium sector and dual purpose (32.9%, 28%, and 27.3 % respectively). The decline was limited to larger fleet operators. With 61,140 units sold, this represented 27.8% reduction over the recorded average within the past decade.
As one would expect, private registrations illustrated a lesser decline of -10.7% (59,841 units). Average recorded private registrations in July 2010-2019 were 67,046.
It was the weakest July prior to the introduction of the split plate system, which was introduced in 1998 (July 1998 registrations: 37,896).
The outlook for the UK economy is looking more positive, the bulk of economic indicators are suggesting that sentiment is weighted toward spending, this includes bigger ticket items. However the pandemic has given way to supply challenges and this will have the effect of restricting growth. Especially, given that August is traditionally a dry month for vehicle registrations. Quarter 4 should see growth tentatively return.
Revising forecasts down is a prudent measure. New car registration data is expected to reach c 1.82 million units in 2021. This represents an uplift of 11.7% on 2020, but it is shy of the forecasted 1.8 million predicted in April. It is also down -21.8% on new car market averages, recorded over the past decade (average annual registrations for 2010-2019: 2,330,307).
