Editor's note

Despite year-on-year increases in new car sales, registrations in May remained well below the numbers seen pre-pandemic. With further restrictions due to be lifted in the next few weeks and consumer confidence continuing to rise, hopefully we’ll see a significant increase in sales over the next couple of months. Interest and demand levels across certainly remain high to support it.

One of the predominant reasons the new car market is suffering, however, is the semiconductor shortage that is wreaking havoc across the global auto industry. Our cover feature this month takes a closer look at the problem, exploring how a small electronic chip has the power to halt production at factories around the world. As Paul Harrison points out in the piece, the crisis has underlined the over-reliance of the automotive sector on disparate supply chains in far-away lands.

The episode will undoubtedly serve as a lesson to manufacturers to diversify their supply networks and reduce the risk of a similar shortage further down the line. The new car market had already been facing an uphill battle before the chip shortage came to light, and with reports of the chip crisis worsening, it could be a long, rocky road to recovery.

We also hear from the Finance and Leasing Association (FLA), who this month published its 2021 Annual Review. As part of the review, the association called for a more unified approach to achieving the government’s 2030 target of no more new ICE vehicles being sold.

Such an approach would ideally involve a regulatory guarantee, with the government assuming proportion of the risk that funders and dealers are currently taking on themselves during the early years of the transition. By doing this, funders will have the confidence to invest greater sums into the green energy space, bringing costs down for the end-consumer and driving the adoption of EVs.

Also in the magazine, we speak to Simon Shuttleworth from Peak Collections about a choppy year in the repossessions market, and discuss of the launch of the new pan-European used car platform Driverama with its chairman Stanislav Galik.

Our Comment section this month features pieces from Sopra Banking Software, Volkswagen FS and V12 Vehicle Finance.

Enjoy!

Chris Lemmon,
Editor