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Annual car sales forecast lowered by 9% amid semiconductor shortage

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he UK car industry has downgraded its forecast for the number of cars it expects to sell this year by 9%.

Around 1.72 million new cars will be registered in 2022, according to the Society of Motor Manufacturers and Traders (SMMT).

This is down from the forecast of 1.89 million issued in January.

The industry cannot expect to thrive in such a challenged market indefinitely

The reduction comes as preliminary figures show the number of new cars registered last month fell by 16% compared with April 2021.

SMMT chief executive Mike Hawes recently said demand for new cars “remains robust” but sales are being severely restricted by the global shortage of semiconductors and other components.

Jim Holder, editorial director of magazine and website What Car?, said the latest monthly figures show the automotive industry is “in an increasingly precarious position”.

It has invested billions of pounds in developing new vehicles – including a raft of electrified models – but output is being “strangled by world events” such as a semiconductor shortage and the war in Ukraine, he explained.

He went on: “While profitability is high, the industry cannot expect to thrive in such a challenged market indefinitely – and likewise consumers cannot carry the burden of paying rising prices unchecked, especially as the cost of living elsewhere puts a focus on non-essential spending.”

The SMMT anticipates that plug-in cars such as pure electrics and plug-in hybrids will account for more than a quarter of the new car market by the end of 2022.

Ben Nelmes, co-founder and head of policy at green motoring consultancy New AutoMotive, said the “steady growth” in electric cars is welcome but the Government needs to “go faster” to encourage more people to make the switch from petrol and diesel cars.

The Government is planning to adopt a zero emission vehicle (ZEV) mandate, which will require manufacturers to sell a certain percentage of those cars and vans from 2024.

Mr Nelmes called on ministers to introduce this at an “ambitious California-style” level.

The US state has been implementing a ZEV mandate since 1990, with the percentage reaching 22% in 2025.

Final figures for the number of new cars registered in April will be published by the SMMT body at 9am.

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