Shortage of semiconductors is stunting the van market

The shortage of these has left van and car makers unable to install the electronics that control safety features, driving aids and entertainment systems. Many factories have gone on to short working while others have suspended operations entirely. German think tank the Center Automotive Research estimates that bottlenecks will dent forecast worldwide production in 2021 by 5.2m cars.

LCV MARKET SEES FIRST 2021 DECLINE

Shortages of semiconductors and other components have led to the light commercial vehicle (LCV) market seeing its first decline since December 2020 as July registrations fell by 14.8%, according to the latest figures released today by the Society of Motor Manufacturers and Traders (SMMT). Supply issues for semiconductors and other parts has meant only 23,606 vans were registered during the month. Despite this challenge, the month’s performance fell only by a moderate 4% compared to the pre-pandemic five-year average.

DEMAND FOR LARGER VANS FALLS

Demand for larger vans weighing more than 2.5-3.5 tonnes, which make up more than seven out of ten of all commercial registrations in the month, saw a decrease of 5.2% to 16,653 vehicles. Other van segments saw more significant declines in demand compared to 2020, with registrations of vans weighing less than or equal to 2.0 tonnes down 38.2% and those of vans weighing more than 2.0-2.5 tonnes down 41.4% to 907 and 2,680 vehicles respectively.

YEAR-TO-DATE REGISTRATIONS REMAIN BOUYANT

However, year-to-date registrations remain up 57.5% on last year – some 78,542 more units – with the market also increasing by 1.1% on the pre-pandemic 2015-2019 five-year average. In total 215,119 new vans have exchanged hands so far in 2021. The increase in van sales over the course of the year has been driven by growth in demand from operators who continue to renew and expand their fleets, notably to meet rising demand for online delivery business and the construction sector.

LCV MARKET FORECAST TO INCREASE IN 2021

Even with July’s decline in registrations, SMMT’s latest quarterly forecast anticipates the LCV market to increase by almost a quarter (24.3%) to 363,880 units in 2021. However, this is a modest reduction of 1.5% from April’s forecast of 369,000 units, which would leave it just shy of the total number of vans registered in 2019.

“While July’s decline in the new van market is disappointing, it must be viewed in context against the semiconductor shortages currently challenging the global industry,” said Mike Hawes, SMMT Chief Executive. “Given the shift to home-deliveries, the strength of construction sector and as the economy opens up further, we expect the market to end the year almost back to 2019 levels. Fleet renewal is critical, not only to ensure the newest, cleanest and greenest vans enter UK roads, but to enable the UK to meet its ambitious green targets.

*www.smmt.co.uk/vehicle-data/lcv-registrations/

Published On: 12/08/2021 16:00:00

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