Business

New car sales down by a quarter on pre-pandemic levels

Sales of new cars last month was 24 per cent down on February 2020, before the virus crisis hit the industry. Picture by Hugh Russell.
Sales of new cars last month was 24 per cent down on February 2020, before the virus crisis hit the industry. Picture by Hugh Russell. Sales of new cars last month was 24 per cent down on February 2020, before the virus crisis hit the industry. Picture by Hugh Russell.

SALES of new cars in the north remain down by a quarter on pre-pandemic levels as the global shortage of computer chips limits supply.

The Society of Motor Manufacturers and Traders (SMMT) said 2,713 new cars were registered in February.

That’s just two per cent up on the same month last year when showrooms were closed due to coronavirus lockdowns.

But the total was 24 per cent below February 2020, before the virus crisis affected new car sales.

And while the 6,874 new cars registered in Northern Ireland for January and February is 38 per cent higher than 2021, car dealers are 28 per cent behind where they were after the opening two months of 2019

Registrations continue to be restricted by the global shortage of computer chips.

Ian Plummer, director at automotive classified advertising business Auto Trader, said there are "signs of pent-up demand that could really set the market on fire later this year".

He went on: "Speak to any manufacturer or motor retailer, and they'll tell you that the market is red-hot and that their order books are full to bursting for months to come.

"Last month Auto Trader saw the volume of new car enquiries increase 44 per cent on the same period last month.

"The car industry's well-documented issues with semi-conductor shortages have so far acted as a brake on the demand of an army of would-be buyers with Covid savings.

"But as production ramps up again that dam looks set to burst later this year as new deliveries pick up speed.

"Order books are rammed until at least September."

According to the SMMT, the Ford Kuga was the best-selling new car in Northern Ireland during February, with 88 cars registered. That was followed by the Hyundai Kona (84), Ford Puma (78), Vauxhall Mokka (63) and the Mini (62).

While it doesn’t provide a breakdown of electric car sales in Northern Ireland, the SMMT said the number of pure electric new cars registered UK-wide last month nearly trebled year-on-year, taking a market share of 17.7 per cent.

The SMMT urged the UK Government to reform VAT rules for electric vehicle (EV) charging as energy costs continue to soar.

VAT on domestic electricity is five per cent whereas motorists using on-street chargers must pay 20 per cent.

That means people whose homes do not have off-street parking pay four times as much VAT to recharge their EVs than those who can top up their batteries while parked on a drive or in a garage.

SMMT chief executive Mike Hawes said: "Despite February's traditional low registration numbers, consumers are switching to EVs in ever-increasing numbers.

"More than ever, infrastructure investment needs to accelerate to match this growth. Government must use its upcoming Spring Statement to enable this transition, continuing support for home and workplace charging, boosting public chargepoint rollout to tackle charging anxiety and, given the massive increase in energy prices, reducing VAT on public charging points.

"This will energise both consumer and business confidence and accelerate our switch to zero emission mobility."