Weakest March for UK car sales since 1998 amid cost of living squeeze and chip shortages – Business Live | Business
Hello and welcome to our ongoing live coverage of business, the economy and the financial markets.
Semiconductor shortages and a squeezing cost of living hit UK car sales last month, despite growing numbers of motorists switching to electric vehicles.
UK new car registrations fell around 14% in March from a year earlier, despite the lifting of Covid-19 restrictions last month, preliminary industry data released this morning showed.
That would bring registrations down to under 250,000, a far cry from March’s average of 450,000 in the decade before the pandemic.
March is usually the most important month for the automotive sector, as the “new” license plates come into effect. But strains on household finances will mean some families will put off buying a shiny new car as rising food, fuel and energy costs eat away at budgets.
Chip shortages also continue to plague the industry, as supply chains continue to struggle after two years of pandemic disruption. UK car production fell 41% year-on-year in February, data showed last month.
In addition to struggling to source chips, manufacturers have also been hit by soaring metal prices, as the war in Ukraine has driven commodity prices up sharply.
UK car sales had risen year-on-year in January and February (compared to weak sales in 2021 when the pandemic hit the sector), so the March slump reverses that tendency.
Electric vehicles, however, are increasingly in demand as motorists shun diesel.
Today’s report should show that March was the best month ever for battery electric vehicle sales, with registrations last month surpassing those for all of 2019.
the SMMT will release final March numbers at 9 a.m.
Also coming today
The latest PMI surveys will show how companies in the UK, Eurozone and US fared last month, in the face of rising energy and commodity prices and the ongoing pandemic.
Oil prices are rising as the United States and France call for a significant escalation in sanctions against Russia following the shocking discovery of hundreds of civilian bodies in towns surrounding kyiv. Brent has gained 1.5% this morning to around $109.
- 9am BST: UK car sales for March
- 9am BST: Eurozone services sector PMI for March (final reading)
- 9.30am BST: UK services sector PMI for March (final reading)
- 1.30pm BST: US trade report for February
- 15:00 GMT: US services sector PMI for March (final reading)