Purchases of new vehicles in NI were down 13% last month compared to a year earlier
New car sales in Northern Ireland remained in the slow lane last month as supply chain challenges continued to dog the industry, a report has said.
The latest data from the Society of Motor Manufacturers and Traders showed 3,539 new cars were sold here in June, down 13% from 4,075 in June 2021.
Ulster Bank chief economist Richard Ramsey said a shortage of components such as semi-conductors, the war in Ukraine, and pandemic restrictions in China were all holding up production, leading to fewer new cars being available to buy.
Across the UK, the industry had its worst June since 1996, with a 24.3% fall in registration of new cars compared with a year earlier. Northern Ireland’s 13% drop during June was also less pronounced than the 25.78% slump in sales in England, and a 19.67% drop in Wales. However, Scotland’s car sales were down by 12.68%, a gentler slump than here.
Mr Ramsey said that new car sales in NI for the first six months of the year were down by nearly a third on pre-pandemic levels, at 21,139. However, that was up slightly on the first half of 2021, and in fact Northern Ireland was the only UK region to see a year on year increase for the first half.
The Hyundai Tucson has been the most popular new car in Northern Ireland over the year so far, selling 602 motors. The Ford Kuga, Hyundai Kona, Volkswagen Golf and Ford Puma complete the top five, in descending order.
Mr Ramsey said: “Ongoing shortages of key components, pandemic restrictions in China and the war in Ukraine continue to blight new vehicle production.
“As a result, supplier delivery times of new cars remain abnormally long. Supply bottlenecks rather than a lack of demand is the primary concern amongst new car dealerships across Northern Ireland.
“After June 2020, last month represented the worst June for new car sales since the SMMT began compiling data for Northern Ireland.”
He said the disruption to new vehicle production was affecting the rental and used car markets. “Those people hiring cars over the summer will not fail to notice the price surge that has occurred. Prices in both these markets have soared due to the lack of new supply.
“New car sales were once a key barometer of consumer confidence. Instead, now they are an indicator of supply chain disruption. Given the economic slowdown that now appears to be in train, dealers are likely to find that once supply disruptions eventually ease, underlying demand will have softened too.”
SMMT chief executive Mike Hawes said: “The semi-conductor shortage is stifling the new car market even more than last year’s lockdown.
“Electric vehicle demand continues to be the one bright spot, as more electric cars than ever take to the road.
“But, while this growth is welcome, it is not yet enough to offset weak overall volumes, which has huge implications for fleet renewal and our ability to meet overall carbon reduction targets.
“With motorists facing rising fuel costs, however, the switch to an electric car makes ever more sense and the industry is working hard to improve supply and prioritise deliveries of these new technologies given the savings they can afford drivers.”
Earlier this year it emerged that production delays are affecting Minis, with fans in NI keen to buy the latest model being offered, the automatic version, which costs around £3,000 more than the manual.
Agnew Group, which sells new Minis through its Bavaria brand, said in May: “There has been a well-documented shortage of component parts for cars, with many manufacturers being impacted as a result. Mini is just one of those brands.
“The war in Ukraine is also contributing to the challenge as some car parts are made there, or elements of parts are produced there.”
Parts which are sourced from Ukraine include wiring harnesses, an assembly of electrical cables or wires.