In the News
Recession Watch: New Car Sales and Production Slump
10th August 2022
New car sales and production are falling in the UK - further evidence of a growing risk of recession.
UK new car sales fell 9% in July as supply chain problems continue https://t.co/woH0DiNSsr
— The Guardian (@guardian) August 4, 2022
Many see the car market as a leading indicator for the macroeconomy. A drop in new sales feeds through to lower production and output throughout the vehicle supply-chain. The number of new cars sold in the UK was down by 10% in June 2022.
Why are new car sales dropping?
- Production delays – global semi-conductor shortage
- Falling real incomes – new cars have a positive income elasticity of demand
- Rising interest rates – makes an unsecured car loan more expensive to finance
- Steep drop in consumer confidence
- Rise in petrol & diesel prices and a continued climb in average car insurance costs
Geoff Riley
Geoff Riley FRSA has been teaching Economics for over thirty years. He has over twenty years experience as Head of Economics at leading schools. He writes extensively and is a contributor and presenter on CPD conferences in the UK and overseas.
You might also like
Four facts about UK manufacturing industry
22nd October 2014
Immigration and the UK Economy
19th October 2014
Twin Peaks for the UK Economy
19th October 2014
Bank of England Chief Economist on the Real Economy
19th October 2014
Recessions are good for the nation’s health
6th August 2014
Britain’s New Industrial Policy: Can We Learn from the Mistakes of the Past?
13th December 2013
Does Manufacturing Matter?
10th January 2012
Six Key Charts on the UK Economy
24th October 2014