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UK CAR SALES - 1st HALF OF 2021

We don’t normally report on the data for car sales (actually registrations) but there are a couple of striking things in the latest data on new vehicles that are published by the Society of Motor Manufacturers & Traders (SMMT). 

The first point is to note that car sales in June, although up by +28% compared to June 2020, are still -16% lower than the average for June over the previous decade (2010 to 2019).  As a result, car sales in the first half of 2021 are down by more than a quarter compared to the average of the previous ten years.  At least for June (and probably May to some extent), this is put down mainly to a shortage of supply of new vehicles as a result of the global micro-chip shortage.  Incidentally, this is also part of the reason why the price of second-hand vehicles has risen and contributed to the higher rate of inflation for the UK in the most recent data. 

However, the main point that we wanted to make about this data for the first half of the year is to note the dramatic change in the market in terms of the power source for new vehicles.  As the table below shows, in 2019, petrol powered vehicles accounted for almost two-thirds of the sales of new cars in the UK, with diesel vehicles accounting for another quarter of the market.  There was a move away from these fuel sources during 2020 and this trend has continued in the first half of 2021 to the point at which petrol vehicles account for less than half of the market and only one-in-ten vehicles have diesel engines as their only source of power. 

SHARE OF UK CAR SALES BY POWER SOURCE 

2019 

2020 

H1/2021 

Diesel 

25.2% 

16.0% 

10.2% 

Petrol 

64.1% 

55.4% 

48.6% 

Mild hybrid 

3.3% 

11.0% 

18.6% 

Electric 

7.4% 

17.5% 

22.5% 

Source:  SMMT 

A short note on definitions is useful here.  A “mild hybrid” vehicle uses battery power to help the petrol or diesel engine in its work while an “electric” vehicle uses electric motors to move the vehicle - there are three types of vehicles in this group which can be battery only, plug-in hybrid or hybrid electric; the latter two categories still have an internal combustion engine, but this is used to generate electricity rather than driving the vehicle via a gear box. 

As a post-script to this article, the top selling car model in the UK in June was the Tesla Model 3, although this may have been a one-off as it does not feature in the top-ten model types for the first half of the year. 

You can get more details on this from the SMMT’s announcement of the June vehicle sales at https://www.smmt.co.uk/2021/07/new-car-market-recovery-squeezed-by-supply-issues/.  We also have a set of charts tracking this change (from which the above table is taken) and if you would be interested in this, please contact Geoff Noon at MTA (e-mail:  gnoon@mta.org.uk).