UK Car Trading Community Expects Chip Scarcity To Continue Until 2023 Car Prices Will Soar

JAKARTA - A global shortage of semiconductor chips will continue to disrupt UK car sales throughout the year until 2023. This has led to a serious decline in vehicle supply in 2021.

The Society of Motor Manufacturers and Traders (SMMT) in the UK said Thursday, January 6, that around one in six new cars sold in the UK in 2021 will be battery electric (BEV) or plug-in hybrid (PHEV) and new car registrations are registered online. overall rose about 1 percent to 1.65 million units from 1.63 million in 2020.

"Not a great year, coming on the back of an equally bad year," said SMMT chief executive Mike Hawes, referring to the impact of the chip shortage on sales hampering the post-pandemic recovery.

A shortage of chips, which are used in everything from brake sensors to power steering to entertainment systems, has led automakers around the world to cut or suspend their production. This has pushed up the prices of new and used vehicles amid strong consumer demand.

Hawes said the average vehicle requires between 1,500 and 3,000 semiconductor chips.

"We think the demand is still there and the demand is still strong," Hawes said. He added that the general view was that a shortage of chips would damage the market during 2022 and this would "flow through to 2023".

Prior to the latest coronavirus spike, SMMT had forecast UK car sales of 1.96 million units in 2022, below the normal operating rate of around 2.3 million units.

SMMT said fully electric BEVs accounted for 11.6% of sales in 2021 - more than cumulative sales for 2016 to 2020. In December, BEVs made up about a quarter of UK car sales.

The PHEV, which has a battery and combustion engine, will account for 8.9% of sales in 2021.

The UK government plans an effective ban on pure fossil fuel models by 2030. But the SMMT says more needs to be done to lower the price of electric vehicles and to improve charging infrastructure, especially for on-road charging.

Across Europe and America, providing access to charging for people who park their cars on the street is a huge challenge.

“Car costs and charging issues are the biggest barriers for people considering this type of purchase," Hawes said. "We're not where we should be."