Supply-chain shortages squeeze UK’s January car output
28 Feb 2022
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But EV surge brightens production outlook…
London – UK car production fell 20.1% to 68,790 units last month, according to figures released by the Society of Motor Manufacturers and Traders (SMMT) 25 Feb.
This marks the weakest January total since 2009, when the industry manufactured a total of 61,404 units.
Output was down 17,262 units against the same month last year, which itself was “one of the worst Januarys on record”, said SMMT.
Volumes in January 2021, it added, were impacted by “friction in the new post-Brexit trading arrangements, extended shutdowns and the pandemic.”
The association linked the decline to the sustained worldwide shortage of semiconductors as well as the loss of volume arising from the closure of Honda's major car manufacturing plant in July 2021.
More positive, however, was the continued shift towards electrified vehicles, with zero emission battery electric vehicles now accounting for one in 11 cars made in the UK.
Production of battery electric cars rose 37.6% to 6,326 units during the first month of the year.
Including plug-in hybrids and hybrids, electrified vehicles accounted for 27.4% of output, up from 25.4% in 2021.
“It’s another torrid start to the year as global supply issues and structural changes squeeze output while model changes impact production scheduling,” said CEO Mike Hawes.
However, he went on to say that the UK automotive manufacturing industry remains “fundamentally strong”.
To deliver long-term recovery, Hawes urged that inflationary and fixed costs, most importantly energy prices, to be addressed.
Reflecting the challenging start to the year, independent expectations for UK car production have been revised downwards from the autumn outlook by 2.4%, to approximately 979,000 units for 2022.
This will still represent a 14.4% increase on 2021’s output, despite the loss of some OEMs and some car production facilities switching to light commercial vehicle production.
According to SMMT, the future of electric vehicle production "is more positive", following confirmations from several manufacturers to expand EV production in the UK.
Longer term, car production is expected to exceed one million units from 2023 onwards, and surpass 1.1 million in 2027.
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