Chip shortage sees new car sales slump by a third in the key sales month of September

New car sales plunged by 35% in September as chip shortages inflicted a major setback on what is normally a key month for the sector, according to industry data.

Just 214,000 new vehicles were registered, the weakest for the month since the “two-plate” system for new cars was introduced in 1999, said the Society of Motor Manufacturers’ and Traders (SMMT).

The SMMT – which issued preliminary data ahead of its full set of figures later on Tuesday morning – said that supply issues caused by semiconductor chip shortages “continue to plague the industry”.

The two-plate system, under which cars are sold with new registration plates twice each year – in March and September – normally boosts demand in each of those months.

But the coronavirus crisis has buckled the market’s usual seasonal trading patterns out of shape, thanks to factory shutdowns and showroom closures last year.

In September 2020, sales were still struggling to recover and hit a post-1999 low of just over 328,000 new registrations.

The chip shortage means that they have now fallen sharply even from those levels.

That is because even as restrictions on UK consumers and industry are eased, the pandemic has resulted in shutdowns of dozens of plants in countries such as Vietnam, Taiwan, and Malaysia, where the chips vital for car production are produced.

The SMMT has estimated that the shortage will result in an overall reduction of 100,000 in new vehicles being made in the UK.

One bright spot in the latest car sales figures was the registration of a record 32,000 battery electric vehicles, compared with 37,850 for the whole of the pre-pandemic year of 2019.

New petrol and diesel vehicles will be banned from sale from 2030.

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Chip shortage sees new car sales slump by a third in the key sales month of September

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