British car production falls again
Multiple issues sent output to lowest level since 1956 – but there’s optimism for 2022
New car output in the UK dropped to its lowest level since 1956 last year as a result of parts shortages, factory closures, staff absences and a drop in demand.
A total of 859,575 cars came from UK factories last year, according to figures from the Society of Motor Manufacturers and Traders – down 6.7% on 2020 and a 34% fall from pre-pandemic 2019.
The SMMT identifies the ongoing semiconductor shortage as the principal cause of the downturn, highlighting various resultant productionline stoppages and output restrictions as manufacturers struggled to obtain the chips, thousands of which go into the average car.
Compounding that issue were cross-industry staff shortages as workers had to self-isolate after positive Covid-19 tests and enforced showroom closures throttling domestic demand for around three months at the beginning of the year.
“Frictions and costs” at the border with the European Union, arising from the new trading agreements introduced in 2021, also slowed exports.
The SMMT notes that some 91% of UK firms reported extra delays and costs as a result of added border paperwork.
There were a number of more positive trends, however, that give the SMMT “grounds for optimism” as 2022 gets under way, chief among them a significant uptick in the number of electrified cars built in the UK.
Production of batteryelectric vehicles (including the Nissan Leaf and Mini Electric) soared by 72% year on year, while rises in plug-in hybrid and hybrid car production meant electrified cars accounted for a record 26.1% of all cars built in the UK last year.
It was a good year for the “small-volume, high-luxury premium vehicle” segment as well, observed SMMT CEO Mike Hawes, while noting that the industry’s “diversity between high-value, luxury, sports, performance and volume” cars means “every company is affected in a slightly different way” by the chip crisis.
Hawes anticipates that “the semiconductor issue
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is going to be tough in the first half of the year, but it will ease and that should flow through to production output”.
It will be difficult to compensate for the closure of Honda’s Swindon factory and other areas of lost capacity, he said, but “with a fair wind in terms of component supply”, the UK should build more than a million cars this year.