Sales of new cars in Northern Ireland remained sluggish last month as supply chain challenges continued to weigh on the industry, according to a report.
Latest data from the Society of Motor Manufacturers and Traders showed 3,539 new cars were sold here in June, down 13% from 4,075 in June 2021.
Ulster Bank chief economist Richard Ramsey said a shortage of components such as semiconductors, the war in Ukraine and pandemic restrictions in China were holding back production, leading to fewer new cars available for purchase.
In the UK, the industry suffered its worst June since 1996, with new car registrations down 24.3% from a year earlier. Northern Ireland’s 13% decline in June was also less pronounced than the 25.78% fall in sales in England and a 19.67% decline in Wales. However, car sales in Scotland were down 12.68%, a milder decline than here.
Mr Ramsey said new car sales in NI for the first six months of the year were down almost a third from pre-pandemic levels, to 21,139. However, that rose slightly compared to the first half of 2021, and in fact Northern Ireland was the only region in the UK to see a year-on-year increase in the first half.
The Hyundai Tucson has been the most popular new car in Northern Ireland in the year so far, selling 602 engines. The Ford Kuga, Hyundai Kona, Volkswagen Golf and Ford Puma complete the top five, in descending order.
Mr Ramsey said: “Continued shortages of key components, pandemic restrictions in China and war in Ukraine continue to hamper production of new vehicles.
“As a result, delivery times for new car suppliers remain abnormally long. Supply bottlenecks rather than a lack of demand are the main concern for new car dealers in Northern Ireland.
“After June 2020, last month marked the worst June for new car sales since the SMMT began compiling data for Northern Ireland.”
He said the disruption in new vehicle production was affecting the rental and used car markets. “Those renting cars during the summer are sure to notice the price spike that has occurred. Prices in both of these markets have soared due to the lack of new supplies.
“New car sales were once a key barometer of consumer confidence. Instead, they are now an indicator of supply chain disruption. Given the economic downturn that now appears to be underway, dealers will likely find that once supply disruptions ease, underlying demand will also soften.
SMMT chief executive Mike Hawes said: “The semiconductor shortage is choking the new car market even more than last year’s lockdown.
“Demand for electric vehicles continues to be the only bright spot as more electric cars than ever hit the road.
“But, while this growth is welcome, it is not yet sufficient to offset the low overall volumes, which has huge implications for fleet renewal and our ability to meet overall reduction targets. carbon emissions.
“With motorists facing rising fuel costs, switching to an electric car is increasingly logical and the industry is working hard to improve the supply and prioritize deliveries of these new technologies given the cost savings that they can allow drivers.”
Earlier this year it emerged that production delays were affecting the Minis, with NI fans keen to buy the latest model on offer, the automatic version, which costs around £3,000 more than the manual.
Agnew Group, which sells new Minis through its Bavaria brand, said in May: “There has been a well-documented shortage of car components, which has impacted many manufacturers. Mini is just one of these brands.
“The war in Ukraine also contributes to the challenge because some auto parts are manufactured there, or parts components are produced there.”
Parts from Ukraine include wire harnesses, a cable or wire assembly.