It will be increasingly difficult for motor finance companies to operate with a fixed rate finance ‘one size fits all’ offering, says MotoNovo Finance.

Jon Slater, MotoNovo’s chief strategy and marketing officer, believes that Covid has changed the consumer credit dynamic. “While some people have been able to save money, sadly, many others have encountered financial challenges. Alongside this have been improvements in financial literacy gained during lockdown, notably amongst the vital millennial sector.

“Today, we must better meet the needs of increasingly well-informed customers across the credit curve. In car finance, one size will not fit all.”

Slater said the challenges facing dealer finance in meeting customer needs are being complicated by the returning lending appetite of personal loan providers. The pandemic saw many providers restrict their lending to protect themselves from an economic downturn, however confidence now seems to be growing.

Nissan has unveiled EV36Zero, a £1bn electric vehicle (EV) hub based at its Sunderland plant, creating around 1,650 jobs.

As part of the investment, Nissan’s partner Envision AESC will build an electric gigafactory, to increase production and provide batteries to power 100,000 Nissan EVs per year. Built adjacent to the Nissan plant, the new plant promises to increase the cost-competitiveness of EV batteries produced in the UK, using a new Gen5 battery cell with 30% more energy density for range and efficiency.

“This is a landmark day for Nissan, our partners, the UK and the automotive industry as a whole,” said Ashwani Gupta, chief operating officer at Nissan. “EV36Zero will transform the idea of what is possible for our industry and set a roadmap for the future for all.”

Of the £1bn investment, the Japanese carmaker will invest up to £423m to produce a ‘new-generation all-electric’ vehicle in the UK.

Cox Automotive has downgraded its new car forecast for the rest of 2021 due to supply issues, despite consumer demand being higher than expected. The revised forecast would see the year’s third quarter end on 522,425 new car transactions, down 17.7% on the 2000-2019 average.

The full 2021 forecast has also been adjusted downwards by 2.48% versus Cox Automotive ‘s April forecast. This scenario assumes that there will still be a modest demand throughout the summer, however supply issues are likely to persist.

Global car supply has dropped significantly during the pandemic due to manufacturers trying to adjust to new ways of working, fi supply chains and source materials for new car production.

Cox’s Philip Nothard said: “Arguably, the used car market has never had this much influence on the industry as a whole. Buyers are flocking towards used cars with money to splash after a largely inactive year, and dealers are enjoying an uplift in activity as a result. But this can only go on for so long, as supply isn’t there to meet demand.”

JLR says the chips shortage affecting the semiconductor industry is creating a “real storm” as suppliers battle to keep up with huge demand.

Several stars are aligning to create surging need for chips, such as industry starting to recover from the Covid-19 pandemic, resulting in a global shortage of semiconductors for automakers and electronics makers, causing delays.

“It is a real storm for the industry, no doubt [about] that,” said JLR chief executive, Thierry Bolloré. “We could mitigate shortages which were already on the market since the beginning of the crisis, which was the beginning of this year especially. You could see our excellent results of the last fiscal year, thanks to that mitigation.

“However, a certain number of accidents occurred in Japan with some suppliers and also in Texas and all that together has created an even stronger storm and we are affected. For me it is going to last because we have learned – because we are not in direct contact with our microprocessor suppliers – it’s our Tier 1s who are in contact with them today.”

Supply issues continue to pose a problem for the new car market, with registrations struggling to reach pre-pandemic levels, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

New car registrations in June were up 28% year-on-year to 186,128. However the performance was artificially lifted through comparison with a year ago, when the UK began to emerge from the first lockdown.

“With the final phases of the UK’s vaccine rollout well underway and confidence increasing, the automotive sector is now battling against a ‘long Covid’ of vehicle supply challenges,” said Mike Hawes, chief executive of the SMMT.

“The semiconductor shortages arising from Covid-constrained output globally are affecting vehicle production, disrupting supply on certain models and restricting the automotive recovery.”