(Reuters) -British new car registrations fell 24% in June from a year earlier, marking the weakest month in 26 years, as the sector struggled with persistent supply shortage of components due to China's COVID-19 restrictions, industry data showed on Tuesday.
The British 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 stay away from big ticket 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 2022 outlook for new cars registered to 1.72 million from 1.89 million forecast earlier.
Lockdowns in China aggravated the shortage of essential auto components, hampering the industry's ability to fulfil demand. Globally, the automobile industry has been one of the hardest hit by supply-chain snags.
"The semiconductor shortage is stifling the new car market even more than last year's lockdown," SMMT Chief Executive Officer Mike Hawes said.
China's economy is now showing signs of slow recovery from the supply shocks, although headwinds to growth persist.
UK's battery electric vehicles (BEVs) sector continued their growth streak, with a 14.6% increase in volume, although plug-in hybrid vehicle (PHEV) uptake fell by 4,425 units.
The slowdown in plug-ins was more than anticipated, leaving the market behind the industry outlook, the SMMT said.
"Part of this fall is attributable to the continuing supply chain shortages that are hampering production of all models, but the scrappage of the plug-in car grant means the UK is now the only major European market without purchase incentives for private EV buyers," the industry body added.
Plug-ins account for a record one in five new car registrations year-to-date, demonstrating manufacturers' commitments to deliver the latest zero-emission-capable vehicles, according to SMMT.
The SMMT said year-to-date new car registrations in the UK fell by around 12% to about 802,000 units, delivering the second weakest first half of a year since 1992.
(Reporting by Aby Jose Koilparambil and Shanima A in Bengaluru; Editing by Barbara Lewis and Sherry Jacob-Phillips)