Time to buy the best of British to assist our car industry

With a global shortage of microchips, the UK manufacturing industry is struggling, says Alan Tovey

Atoxic cocktail of trouble means the number of cars rolling off British production lines this year is predicted to plunge to lows last seen in the 1950s.

Only 950,000 cars are expected to be built in the UK in 2021, only slightly above the 920,000 produced last year, when lockdowns forced factories to shut for weeks as they adjusted to Covid-safe working practices.

But there’s pent- up demand for new cars. Consumers unable to splash out on foreign holidays want other avenues to treat themselves – and a new motor is favourite. This appetite is borne out by the big dealer groups reporting record profits, having taken a hammering last year.

So what’s causing the disconnect? Unquestionably it’s the lingering effects of coronavirus. On a domestic level, the “pingdemic” has put the brakes on production, with big manufacturers having to cut shifts or halt work as staff were forced to isolate.

But a far bigger challenge is the shortage of microchips. It’s causing havoc in the global car industry.

When the pandemic first hit, car makers cut back orders for chips, of which the average car contains about 1,500. But the industry was caught out by how fast demand for cars bounced back.

The problem is that by cutting orders, car makers went to the back of the queue behind consumer electronics manufacturers, which boomed as locked- down populations went on spending sprees.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: “It was a surprise for the industry, which is used to being a big beast in the supply chain.”

The shortages, predicted to last into next year, mean production had to stop. Building cars with parts missing is almost impossible, as you can’t go back and install a chip deep inside a vehicle.

Most makers have resorted to directing chip supplies into their most profitable – and usually most expensive – models, or finding workarounds such as replacing digital speedometers with analogue ones.

So what’s a patriotic driver who wants a new vehicle and to boost the British car industry – even if it is entirely foreign-owned – to do?

Go posh and you’ll not go far wrong. Aston Martin, Bentley, Lotus, Morgan, McLaren and Rolls-Royce trade off their British heritage. They aren’t going offshore. But buying a Honda is out of the question: it closed its Swindon plant in July. And Vauxhall’s Ellesmere Port factory is switching to electric vans, so you’ll have to rush to get an Astra from there, and it’ll probably have to be an estate, which dominates the facility’s production and isn’t too popular with British drivers.

You could contribute to the legend of the Toyota Corolla, the world’s bestselling car, with more than 45m produced so far. The latest version has rolled out of Toyota’s Derbyshire plant since 2019. The hybrid version has a British-made engine, too.

BMW- owned Mini is another option. The Oxford plant makes the three- and five- door models, as well electric versions. Stay away from the Mini Countryman, though: it’s made in Europe.

If you’re hankering for something from Jaguar Land Rover’s stable, there’s a good chance you’ll be buying British. Most of the portfolio comes from the company’s Midlands plants. But if patriotism is more important than off-road capability, avoid the Discovery and new Defender; they’re built at JLR’s Slovakian factory. The E-Pace small SUV and the electric I-Pace are built by Magna, a contract manufacturer, in Austria.

Designed, engineered and built in Britain, Nissan’s Qashqai has long been the UK’s favourite SUV. The latest model started production at the Japanese company’s Sunderland plant this year, along with the smaller Juke and the electric Leaf.

From 2030, the sale of new cars with internal combustion engines will be banned. In July Nissan and its partner Envision got ahead of the pack by announcing £1bn of investment at the site to create the UK’s first battery gigafactory. Capable of producing nine gigawatt hours (Gwh) of batteries annually when operational in three years, that’s enough to power 100,000 cars annually. Envision has said if demand is there it could invest in taking the site to a capacity of 35Gwh.

But no matter how willing British drivers are to support the UK car industry, without the gigafactories the future is bleak. It’s estimated the

UK needs gigafactories able to make 60GWh of batteries annually by 2030 for domestic firms to produce 1m electric cars. And because of the motor industry’s “make where you sell” principle, without them it’s unlikely British car plants have a bright future.

Still, there is hope – sort of. The Government has committed £500m to support the transition of the supply chain to electric cars, though this is a fraction of what the EU is committing.

Britain is known as “treasure island” in the industry. We tend to buy cars that are higher spec, and therefore more profitable for manufacturers, than most other nations.

Buying British now might just help move the needle enough to convince the global – and highly mobile – car industry that the UK remains worth investing in.

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