U.K. Carmakers See 2022 Sales Rebound as Chip Crunch Eases

(Bloomberg) -- U.K. automakers expect sales to rebound this year as the semiconductor shortage eases and demand for battery-powered vehicles grows.

The Society of Motor Manufacturers and Traders estimates new-car registrations in Britain will climb 19% to 1.96 million in 2022. The group said it will update that forecast -- formulated shortly before the emergence of the highly transmissible omicron coronavirus variant -- again later this month.

“How good that growth is depends on the supply-chain issues being resolved,” Mike Hawes, SMMT’s chief executive officer, told reporters during a briefing. “We know that the demand is there, the technology is there, the new models are there.”

The global chip shortage hit the industry hard last year and halted vehicle manufacturing across several regions. Automakers from Vauxhall owner Stellantis NV to Mini maker BMW AG are hoping the bottleneck will gradually ease this year but have warned supply will remain tight in the first half.

While 2021 was supposed to represent a lasting recovery from the initial onslaught of the pandemic, U.K. vehicle registrations inched up just 1% to 1.65 million last year because of the persistent supply-chain snarls, according to preliminary SMMT data. That’s about 29% below pre-pandemic levels.

The figures in the U.K. are nevertheless better than those of several other European markets including Germany, where passenger-car registrations slumped 10% last year to the lowest level in more than three decades.

Bright Spot

Electrified vehicles were a rare bright spot in the region and especially in Britain, where more battery-powered cars were registered in 2021 than in the five previous years combined. Tesla Inc.’s Model 3 was the second-best selling car in the U.K. in 2021, beaten only by Stellantis’s Vauxhall Corsa hatchback, according to preliminary figures from SMMT.

Still, Hawes called for greater state support to bolster the transition toward EVs after the government halved grants to the industry in the space of less than a year.

©2022 Bloomberg L.P.