Rising interest rates impacting car buying, whilst UK automotive sector investment at risk

Responding to the latest SMMT UK car manufacturing data:

Richard Peberdy, UK Head of Automotive, KPMG, said:

“UK automotive manufacturing remains in a perilous state, with businesses worrying about high and sustained inflation in energy, material and logistics costs.  All this from a base line of throttled supply chains in key components and of course the costs and disruption of the covid years. 

“I worry about the UK sector’s ability to invest in key technology development and skills.  Both are critical for the UK to retain any position of strength in the medium term, as the global automotive and mobility industry reshuffles itself around energy transition and new global platforms.”

Responding to the latest SMMT new car registrations data:

Chris Knight, UK Automotive Partner, KPMG, said:

“The order books for manufacturers remain strong, particularly for EVs, with long wait times still in place for new vehicles - reflecting the importance consumers place in having a new car.  However, rising interest rates are impacting monthly repayment costs and inflation is putting pressure on manufacturers to raise prices.  With an expensive winter looming, many consumers are reassessing or pausing new car purchase decisions.

“With more consumers having to be led by price, some car makers feel there is a market space to be seized upon – including manufacturers from the east moving into western car markets, particularly hoping to secure lower-cost electric vehicle market share.”

Media contact:

Steven Reilly-Hii,
Media Relations Manager, KPMG LLP
E: steven.reilly-hii@kpmg.co.uk 
T: 07510 376635.

About KPMG:

KPMG LLP, a UK limited liability partnership, operates from 22 offices across the UK with approximately 15,300 partners and staff.  The UK firm recorded a revenue of £2.43 billion in the year ended 30 September 2021.

KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 145 countries and territories with more than 236,000 partners and employees working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.