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3 Important things happening this week

1. The ombudsman investigates complaints about electric vehicles; dealers are under pressure

In 2021, one-third of the complaints received by The Motor Ombudsman from electric vehicle owners were about point-of-sale difficulties or poor post-purchase customer care.

The rest of the complaints were about their electric car, its systems, or critical feature faults, according to the automobile industry’s ombudsman.

Software flaws, for example, were the second most common reason for electric car complaints (13%), with upgrades and system issues causing consumer dissatisfaction.

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Similarly, 12% of the issues raised by customers in 2021 stemmed from the car’s inability to charge to its full capacity, with component-specific issues pertaining to the charging flap and socket also coming to light.

The average claim for owners who wanted a monetary sum to remedy their electric car issue was £10,700.

This is more than double the claim amount recorded throughout the ombudsman’s four Codes of Practice in the first half of last year (average £4,085), which is likely attributable to the initial expenditure for a zero-emission car being frequently more than that for identical petrol or diesel models.

Some of the complaints were over bodywork flaws discovered after delivery, as well as erroneous satellite navigation systems and incorrect or missing cabin equipment.

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of the difficulties were connected to the vehicle’s chassis and propulsion, with stalling due to electric motor failures, as well as suspension and brake failures, being the most common.

Bill Fennell, chief ombudsman and managing director of The Motor Ombudsman, said “Electric vehicles account for a relatively small proportion of the overall disputes that we see on an annual basis. Our latest data analysis for 2021 provides a snapshot of the principal issues affecting the customer’s EV purchase and ownership journey, and where complaints are arising. Our most recent data analysis for 2021 gives a picture of the most important concerns influencing the customer’s EV purchase and ownership experience, as well as where complaints are being raised.

"It's worth noting that many of the EV conflicts revolve around point-of-sale concerns and the quality of service offered, which are also common complaints with traditional internal combustion engines." "While electric vehicles remain a modest percentage of the entire vehicle fleet, car registrations are growing year after year," he noted. "As a result, the number of consumer complaints is anticipated to climb in step with this trend." As a result, we will continue to identify significant areas of consumer discontent in order to promote continuous improvement across the industry."

In contrast to the high percentage of complaints about customer service and point of sale, batteries and range accounted for the fewest percentage of EV complaints to The Motor Ombudsman last year, at 7% and 6%, respectively.

The main issue with the range was that it delivered lower-than-advertised mileage on a full charge, which was especially problematic for EV owners in rural locations who relied on being able to travel a long distance.

Unlike the 1,700 service and repair cases filed with the ombudsman in 2021 involving internal combustion engines, aftersales concerns about electric vehicles were not seen as a major issue by consumers in 2021, which the ombudsman believes could be explained by the fact that the electric vehicle fleet in the UK is still relatively new, and that there are fewer moving parts than in an internal combustion engine vehicle.

A full refund for the price paid for their electric vehicle was the most requested resolution to their dispute (22%) among those who filed a complaint in relation to an issue with their vehicle in 2021, followed by a replacement vehicle, a free-of-charge repair, and an extension of the terms to cover the cost of the rectification of a mechanical issue.

2. The Used Car boom began to plateau in January

Following an unparalleled year of expansion, used-vehicle supply levels and prices stayed constant in January.

According to data from eBay Motors Group, average used car prices increased by only 0.8% month over month, while stock levels remained stable.

The number of days it takes to sell an item has increased from 39 to 45, bringing it closer to pre-pandemic norms.

“January was characterised by some welcome stability across the sector. The continued levelling out of advertised prices was good news for dealer profitability, especially as stock levels remained constant,” said Dermot Kelleher, head of marketing and research at eBay Motors Group.

“The rise in days to sell is no cause for alarm, as they’re actually tracking close to the pre-Covid January levels of 44 days recorded in both 2019 and 2020.”

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Units in January
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down year-over-year
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In December

Faced with a chronic lack of used car inventory, dealers began January with an average inventory of 46.7 cars, down 10% year-over-year from 47.1 in December.

Stock levels remained steady month to month across the three major retailing channels, with auto stores showing a little increase from 351 to 354 units, although being down 6.5% from 379 in January 2021.

Franchised dealers sold an average of 61 vehicles, down one car month over month and year over year. Independents average 33 units, which is unchanged from December but down 13.4% year over year.

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Franchised Dealer Units
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Independent Dealer Units

The independent sector had the highest month-on-month increases, with prices rising 3.4% to £14,714. While average costs in franchised dealers and vehicle stores remained unchanged at £21,808 and £18,922, respectively.

According to Auto Trader, used car prices increased by 30.5% in December. Because of the increase, a fifth of ‘almost new’ automobiles are now more expensive than their brand-new counterparts.

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Increase in Used Car Prices

Although average days to sell climbed by 15% month over month, from 39.4 to 45.5 days, it was still better than the 51.2 days averaged in January 2021, when the UK was under Covid lockdown.

Car supermarkets sold cars in the shortest amount of time (35.1 days), followed by franchised dealers (45.6 days) and independents (48.8 days).

3. New Car registrations surged by more than 27%

The Society of Motor Manufacturers and Traders (SMMT) released data this morning (February 4) showing that 115,087 automobiles were registered in January, up 27.5% from the same month last year.

The SMMT disputed the good news by adding that the January 2022 figure was compared to 2021 data, which were impacted by lockdown-related showroom closures.

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Overall, pre-pandemic January 2020 was down by little under 23% in January 2022.

Low customer confidence and global scarcity of computer chips, which is constraining supply, are reducing sales, according to the organisation.

Private purchasers drove the increase in January, as carmakers prioritised these customers during the new car scarcity.

In the private sector, 62,300 new automobiles were registered, jumping 64.1% year over year and just 5.6% below pre-pandemic levels.

Meanwhile, large fleet registrations were roughly steady from the previous year, with 50,817 units (down 0.4%).

Battery electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) vehicles account for 71.5% of the increase in registrations.

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Plug-in cars had another strong month, with 14,433 BEVs and 9,047 PHEVs registered, accounting for around 20% of the market.

With 13,492 HEVs registered in January, nearly one in every three new automobiles on British roads was an electric vehicle.

The SMMT has also lowered its forecast for total new car registrations in 2022.

The organisation estimated 1.96 million automobiles will be registered in 2022 in October 2021, but this has now been revised to 1.897 million – still a 15.2% increase over 2021, but down 17.9% from pre-pandemic 2019.

Registrations of BEVs and PHEVs are predicted to increase by 61% and 42%, respectively, within the 1.897 million forecasts, implying that by the end of the year, nearly one in every four new cars will have a plug.

‘Given the lockdown-affected January 2021, this month’s results were always going to be an improvement, but it is still comforting to witness a stronger market,’ said Mike Hawes, SMMT Chief Executive.

‘Despite the continued challenges of chip shortages, growing inflation, and the cost-of-living crunch, electric cars are once again driving growth.’

‘However, 2022 is off to a fantastic start, and with roughly 50 new electrified models set to be released this year, customers will have an even wider choice, which can only be beneficial for our shared environmental goals.’

Meanwhile, the Kia Sportage was the best-selling vehicle in January, with 3,458 registrations.

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Kia Niro
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Ford Puma
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Korean SUV

It’s the first time Kia has led the sales statistics in the United Kingdom.

The forecast for 2022 is still bleak.

While this year is off to a better start than last, the forecast for new car registrations in the UK – and hence the industry’s health – in 2022 remains gloomy.

A partial rebound from last year’s disastrous 1.65 million new automobile registrations to a total expected to be closer to 2.0 million this year is good, as seen by this month’s data, but it’s still a long way from the over 2.7 million registered in 2016.

Multiple difficulties, headed by the semiconductor chip shortage, are stifling the industry’s revival – and, despite the encouraging trends, these supply constraints may hold back an even quicker adoption of cleaner, plug-in automobiles.

Furthermore, the buyer pays the price as manufacturers strive to increase profit margins on the fewer automobiles they sell, in some cases by withdrawing lower-cost variations from the market. Prices of new automobiles are fast rising due to the growing cost of various basic materials, which is also being added on.

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