UK auto industry cuts 2022 outlook on supply snags, rising cost of living

British new car sales this year will be lower than previously thought as the cost-of-living squeeze in Britain and persisting chip shortages impact the auto market, industry data showed on Thursday.

The Society of Motor Manufacturers and Traders (SMMT) said 2022 outlook for new cars registered has been cut to 1.72 million from 1.89 million forecast earlier.

“The worldwide semiconductor shortage continues to drag down the market, with global geopolitical issues threatening to undermine both supply and demand in the coming months,” SMMT Chief Executive Officer Mike Hawes said.

UK new car registrations fell about 16 percent to 119,167 units in April, according to the latest figures by the SMMT, with electric vehicles making up nearly 28 percent of the registrations.

SMMT also cut the annual outlook for battery electric vehicles’ (BEV) registrations to 289,000 units from 307,000. Hawes said broad measures that encourage demand and addresses obstacles such as “charging anxiety” are needed to hasten the transformation of the new car market and for carbon savings.

British consumer sentiment was close to a record low in April as the worsening cost-of-living crisis hurts their personal finances, forcing them to tighten their purse strings and rethink major purchases.