New cars are pictured at a car dealership, as Britain’s auto industry body releases monthly new car sales figures, in Cheshire, Britain October 5, 2020 REUTERS/Jason Cairnduff

July 5 (Reuters) – Britain’s new car registrations fell 24% in June from a year earlier, marking the weakest month in 26 years, as the sector grappled with a continuing shortage of component supply due to Chinese COVID-19 restrictions, according to industry data on Tuesday.

Britain’s auto industry, already reeling from a severe shortage of semiconductors, is now bracing for a cost-of-living crisis in the country as people limit their spending to necessities and avoid large items.

New car registrations in Britain fell to 140,958 units, according to final figures from the Society of Motor Manufacturers and Traders (SMMT).

In May, SMMT cut the 2022 outlook for new car registrations to 1.72 million from 1.89 million forecast earlier. Read more

Lockdowns in China have worsened shortages of key auto components, hampering the industry’s ability to meet demand. Globally, the automotive industry has been one of the hardest hit by supply chain issues.

“The semiconductor shortage is stifling the new car market even more than last year’s lockdown,” SMMT chief executive Mike Hawes said.

China’s economy is now showing signs of a slow recovery from supply shocks, although headwinds to growth persist.

The UK battery electric vehicle (BEV) sector continued its growth streak, with a 14.6% increase in volume, although take-up of plug-in hybrid vehicles (PHEV) fell by 4,425 units.

The slowdown in plug-ins was more than expected, leaving the market behind the industry outlook, SMMT said.

“Part of this decline is attributable to ongoing supply chain shortages which are hampering production of all models, but the scrapping of the plug-in car subsidy means the UK is now the only major market European Union without purchasing incentives for private EV buyers,” the industry body added.

The plug-ins represent a record one in five new car registrations year-to-date, demonstrating automakers’ commitment to providing the latest zero-emission vehicles, according to SMMT.

The SMMT said UK new car registrations since the start of the year fell around 12% to around 802,000 units, delivering the weakest second half since 1992.

Reporting by Aby Jose Koilparambil and Shanima A in Bengaluru; Editing by Barbara Lewis and Sherry Jacob-Phillips

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