Overall new car registrations climbed around 1 percentage point to 1.65 million units from 1.63 million in 2020.
“Not a great year, coming on the back of an equally poor year,” SMMT chief executive Mike Hawes summed up, referring to the impact of semiconductor chip shortages on sales.
The shortage of chips, used in everything from brake sensors to power steering to entertainment systems, has prompted automakers around the world to cut or suspend production, pushing up both new and used vehicle prices amid robust demand from consumers.
Mr Hawes said the average vehicle requires between 1,500 and 3,000 semiconductor chips.
“We think demand is still there and demand is still strong,” he said.
He added that the general view was that the chip shortage would undermine the market over the course of 2022 and this would “flow through to 2023”.
Before the most recent coronavirus surge, the SMMT had forecast UK car sales of 1.96 million units in 2022, below the normal run rate of around 2.3 million units.
The SMMT said fully-electric BEVs accounted for 11.6% of sales in 2021 – more than the cumulative sales for 2016 to 2020. In December, BEVs made up roughly a quarter of UK car sales. PHEVs, which have both a battery and a combustion engine, accounted for 8.9% of sales in 2021.
The UK government plans an effective ban on pure fossil-fuel models by 2030, but the SMMT insists that more needs to be done to lower electric vehicle prices and to improve charging infrastructure, especially for on-street charging.
Across Europe and America, providing access to charging for people who park their cars on streets is a major challenge.
Car costs and charging concerns are the “biggest barriers to people considering this type of purchase,” Hawes said. “We’re not where we need to be.”