U.K. Car Sales Plunge to Worst September in Decades on Chips

(Bloomberg) --

Automakers logged their weakest September sales in the U.K. since 1998 as the global shortage of semiconductors constrains production.

Registrations plunged more than a third from a year ago to 215,312 cars, according to the Society of Motor Manufacturers and Traders. It’s a significant blow to the industry because September is typically the market’s second-busiest month of the year.

“This is a desperately disappointing September and further evidence of the ongoing impact of the Covid pandemic on the sector,” SMMT Chief Executive Officer Mike Hawes said in a statement. “Despite strong demand for new vehicles over the summer, three successive months have been hit by stalled supply due to reduced semiconductor availability.”

One silver lining for the industry was the record showing for battery-electric vehicles. Sales soared 49% as fuel shortages caused chaos across the country. The 32,721 new EVs registered in the month was roughly 5,000 cars shy of the total for all of 2019. Tesla Inc.’s Model 3 was the overall top-selling vehicle of the month, with 6,879 registered.

The U.K. isn’t alone in seeing auto sales plunge. Registrations fell 33% in Italy, 20% in France and 16% in Spain as carmakers contend with what may be the most protracted supply shortage in history. Volkswagen AG said Monday it had an order backlog of about 130,000 Golf cars and more than 110,000 Tiguan sport utility vehicles as the chip shortage hobbles its production.

“Covid-related factory output problems will be limiting some sales,” said Richard Peberdy, KPMG’s head of automotive. “Levels of inflation in parts of the economy are also spooking motorists and businesses into tightening spending.”

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