Business

Supply chain issues hindering Northern Ireland car industry's post-lockdown recovery

Last year's slump in production coupled with a shortage of components is hindering the car industry's ability to recover post-lockdown.

SALES of new cars remain well below pre-pandemic levels during May, with supply chain issues hampering the industry's post-lockdown recovery.

A total of 3,879 new cars were registered in Northern Ireland last month.

Although an eye-watering 2,594 per cent up on the 144 sales from May 2020, the Society of Motor Manufacturers and Traders (SMMT) said the industry's May 2021 performance remained 21 per cent down on the same month in 2019, when 3,879 new motors were sold.

It leaves car showrooms in the north 9,000 sales down for the year to date, compared with 2019.

Ulster Bank's chief economist Richard Ramsey said while there may be pent-up demand, it's not translating into pent-up sales.

He said when 2020 was taken out of the equation, 2021 has been the worst start to a year for car showrooms.

“Looking at the first five months of the year there were 16,773 new cars sold locally.

“This is up 41 per cent year-on-year on 2020's ‘annus horriblis' but it is still almost 9,000 fewer (-35 per cent) below the corresponding period in 2019.”

Supply chain disruption continues to be a major issue for the UK and Northern Ireland economies, with the car industry not exempt.

Mr Ramsey said the slump in car production last year coupled with a shortage of components means the industry is not going to rebound to 2019 levels anytime soon.

“Motorists placing an order today will do well to get a delivery before 2022.

“If 2019's sales volumes of new cars in Northern Ireland had been maintained, there would have been an additional 24,200 cars sold over the last 17 months,” said the economist.

“This is having a significant impact on the used car market too with the reduced flow of stock.”

He said the Northern Ireland market could soon see a similar impact to the USA, where second-hand car prices have surged by 20 per cent in a year due to the lack of supply.

“Both the used car and housing markets in Northern Ireland are facing the same problem.

“Demand is outstripping supply. Therefore finding a bargain will be increasingly difficult in both markets.”

Enjoy reading the Irish News?

Subscribe now to get full access

Business