No one can say that 2022 was uneventful in the motor industry. Some might say that it was the most action that is has seen in decades. Everything was thrown at the motor industry and yet it still plodded along and thrived in places, resilience and adaptability being key to growth and profitability.
Supply chain issues impacted new car sales, driving an increased demand for used cars. Major political and financial upheaval, coupled with the deepening cost of living crisis changed consumer spending habits.
Electric cars saw a surge in demand and sales increased to their highest levels, showing that environmental issues are still foremost in people’s minds and that the government's pledge to increase charging ports had really allowed EVs the freedom they needed.
Overall, car registrations for 2022 were down, almost 25% lower than in 2019 pre-pandemic. However, Electric vehicle registrations grew, being almost 5% higher than the previous year, accounting for a fifth of all car sales last year.
Astonishingly over 60% of those sales were business and fleet customers, business owners are really stepping up and making environmental business choices and reducing their carbon footprint.
Government schemes to help people and businesses finance EV’s have been slowly dwindling and the amount of support that is offered has been capped at £1500 off selected models of cars, vans and motorbikes since June 2022.
Sales have continued to soar throughout 2022, with over half a million EVs on the road in the first half of last year, it shows that despite the reduced government help, EV’s are here to stay and people can see more than just the environmental benefit of leasing them.
The charging infrastructure for electric vehicles has had a huge boost from the government, with them pledging millions to increase charging ports and improve existing ones.
The government has pledged to invest a massive £500 million on the installation of 300,000 charging ports, making it easier to charge on the go, and increasing the rapid charging facilities available, reducing the current range anxiety some EV users have when travelling away from city centres.
The origins of the chip shortage can be traced back to the pandemic in 2020 when factories shut down and production just wasn’t happening. These issues carried on when Brexit legislation made it harder for companies to get supplies into the UK, causing massive delays.
The war in Ukraine also impacted supply to the UK when production of the ‘wire harness’ which is like the central nervous system to a car had to cease for a while until it was safe for the workers to continue.
Suppliers around the world were encouraged to stop trading with Russia and this had an added impact on the UK with rapid rising fuel costs, meaning that not only could new cars not be rolled off the production line but filling your existing car just got a lot more expensive.
China played its own part with their zero covid policy, with whole factories being shut down when just one person tested positive. This caused massive backlogs to orders right across the industry and whilst it might be moving again, supply is still not up to its pre-pandemic levels, and some even predict that it could be 2024 before the motor industry gets the level of supply it needs to meet demand.
Some countries, the US in particular, invested huge sums of money to build and fabricate their own semiconductor chips so that in the future they would be able to keep supply moving and not be reliant on imports. This brings essential investment in to the US economy but also shows a resilience throughout the industry, that faced with adversary they could find a way around it to learn and adapt for the future.
With all the delays and shortages affecting the production of new cars, it naturally had a knock-on effect to the used vehicle industry and consumers saw this reflected in the prices.
Used car prices rose over 30% from the previous year, ensuring that sellers had the ability to make a profit from their old car, assuming that they had another car waiting for them as another feature was that with new cars not being made fast enough, the second-hand market, whilst profitable, was also small as people held on to them for longer.
British is Best
2022 also saw the British market take the lead with the Nissan Qashqai
being the UK’s favourite car, the first time in over 20 years that a British built car has topped the UK car charts. The Qashqai was designed, engineered and built in the UK.
The Ford Fiesta
also topped the charts in used cars, but this was for a very different reason. 2022 saw the sad news that Ford were going to stop the production of the Fiesta as they moved forward and concentrated on electric vehicles. The Fiesta is expected to stay quite popular in the used car sales thanks to this.
What's to come in 2023?
What can we expect from 2023? Well, we think it’s safe to say that the supply issues aren’t fully solved yet, but massive steps have been taken forward and whilst production is slow it is still going, and new cars are rolling off the production line.
There is a distinctive shift in car manufacturing this year with more electric cars in production and less traditional petrol and diesel - in fact there were more electric cars sold than diesel in 2022 which is a telling sign of the shifting nature of the consumer. Environmental issues really matter to us, and those that can make the change are. The Polestar 2 BST Edition 270 and the Hyundai Ioniq 6
and the Kia Soul EV Urban
, just some of the new arrivals in the next few months.
There will continue to be advancements in technology, making cars, cleaner, greener and smarter. Car manufacturers have shown that when they pushed, they can certainly deliver, they listened to the people and the government and created cars that with each generation create less pollution and are more ethically sourced; technology is growing with us, and cars are no exception to that.