‘State-imposed supply chain’ hits new car market, says Robert Forrester of Vertu

Car manufacturers are rationing the UK supply of petrol and hybrid cars as they grapple with government-imposed environmental targets leading to growing frustration among consumers, according to an AM100 group leader.

Robert Forrester, the chief executive of AM100 top 10 dealer group Vertu Motors has pointed to the growing tension between government environmental policies and the practical realities faced by car manufacturers and dealerships.

While the zero emission vehicle (ZEV) mandate aims to accelerate the transition to electric vehicles, its implementation has led to unintended consequences, including constrained supply of petrol vehicles and financial losses for carmakers.

The ZEV mandate, which requires at least 22% of cars sold by manufacturers to be electric from this year, imposes hefty fines - £15,000 per excess petrol vehicle - on companies that fail to meet their quotas.

According to Forrester, interviewed in the Daily Telegraph, manufacturers are deliberately delaying deliveries until next year to avoid severe penalties under these net zero policies.

He said such policies have resulted in extended wait times for consumers ordering petrol vehicles, with some buyers facing delays until February. At the same time, dealerships are dealing with a surplus of electric vehicles (EVs) that are proving difficult to sell despite significant price reductions.

Not the case, says New Automotive

But his view was countered by Ben Nelmes, chief executive of New Automotive, an independent transport organisation which has a mission to support the switch to electric vehicles. 

It insists that data shows strong demand for electric vehicles, driven by increasing consumer awareness of climate change and the cost benefits of EVs.

But that's not what Vertu Motors, which also trades as Bristol Street Motors, is seeing.

"It's almost as if we can’t supply the cars that people want, but we’ve got plenty of the cars that maybe they don’t want," Forrester said, highlighting the disconnect between consumer demand and the vehicles being pushed to market.

This issue is exacerbated by the financial pressures facing car makers, who are being forced to sell EVs at significant losses due to the discounts required to stimulate demand.

Vertu Motors itself last week reported a 5.8% decline in new car sales by volume in the five months leading up to July 31, with the group anticipating lower first-half profits as EV demand remains weak.

Manufacturers "panicking"

Industry leaders, including Stellantis CEO Carlos Tavares, have voiced concerns over the long-term viability of such strategies, warning that selling vehicles in the UK at a loss is unsustainable.

"The new car market is no longer a market, unfortunately. It’s a state-imposed supply chain," said Forrester who cautioned that this approach not only distorts the market but could also deter manufacturers from maintaining a presence in the UK.

At New Automotive, Nelmes accused some vehicle manufacturers of "panicking", and said the best major brands understand that the future of transport is electric.

"Carmakers such as Ford, which lobbied for more stringent zero emission vehicle mandate targets in 2021 when it thought they could get a competitive advantage, are now panicking when they are not hitting their own targets," said Nelmes.

"Instead of lamenting for the laggards, we should be celebrating the fact that the UK is leading the way towards a cleaner, cheaper, more sustainable future."