Business

Global chip shortage hit NI car showrooms during June - SMMT

A global shortage in the supply of semiconductors is affecting car manufacturers, with a knock-on impact for dealers.

A GLOBAL shortage in semiconductor chips and supply chain disruption is continuing to hit car showrooms across the north, a leading industry body has said.

The Society of Motor Manufacturers and Traders (SMMT) said 4,075 new cars were registered in Northern Ireland during June 2021.

Although a 24 per cent increase from June 2020, the figure is more than 1,000 cars below June 2019, when 5,170 new cars rolled out of showrooms here.

A total of 20,848 new cars were sold in Northern Ireland in the first half (H1) of 2021, just under 10,000 below the same period in 2019.

It represented the second worst H1 on record for the industry.

SMMT’s chief executive Mike Hawes said while the vaccine programme has helped improve consumer confidence, he claimed the automotive sector is now battling against a ‘long Covid’ of vehicle supply challenges.

“The semiconductor shortages arising from Covid-constrained output globally are affecting vehicle production, disrupting supply on certain models and restricting the automotive recovery,” he said.

Ulster Bank's chief economist Richard Ramsey said the 'supply shock' is currently acting as a handbrake on the new car sales recovery.

"Lengthening supplier delivery times is a feature of the car industry alongside many other sectors of the economy," he said.

"A typical new car contains around 1,000 computer chips and these are in short supply.

"Car manufacturers have scaled backed production in line with the availability of key components such as semi-conductors. This supply chain disruption is expected to persist for some time.

"As a result, new car sales, which is traditionally a good barometer of consumer confidence, is going to understate consumer sentiment."

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