UK car manufacturing output fell 37.6% in July, the first fall since February, with just 53,438 units made, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT).
It represented the worst July performance since 1956 as manufacturers grappled with the global shortage of semiconductors and staff absence resulting from the ‘pingdemic’, with some altering summer shutdown timings to help manage the situation.
In July production for the UK market declined 38.7% to 8,233 while manufacturing for export also fell, down 37.4% with 45,205 cars shipped overseas. Exports accounted for more than eight out of 10 (84.6%) vehicles built in the month as buyers around the world continued to be attracted to the wide range of high-quality cars made in Britain, including the latest alternatively fuelled models.
More than a quarter (26.0%) of all cars made in July were either battery electric (BEV), plug in hybrid (PHEV) or hybrid electric (HEV), their highest share on record, and meaning that UK car factories have turned out 126,757 of these important products since the start of the year.
Production overall in the first seven months of the year remains up 18.3% on Covid-hit 2020 at 552,361 units, but this is down significantly (-28.7%) on 2019 pre-pandemic levels when 774,760 cars rolled off production lines.
Mike Hawes, SMMT Chief Executive, said: “These figures lay bare the extremely tough conditions UK car manufacturers continue to face. While the impact of the ‘pingdemic’ will lessen as self-isolation rules change, the worldwide shortage of semiconductors shows little sign of abating. The UK automotive industry is doing what it can to keep production lines going, testament to the adaptability of its workforce and manufacturing processes, but Government can help by continuing the supportive Covid measures currently in place and boosting our competitiveness with a reduction in energy levies and business rates for a sector that is strategically important in delivering net zero.”
Richard Peberdy, UK head of automotive at KPMG, said: “Supply chain pressures continue to weigh heavy on auto manufacturers as the wider economy edges closer towards recovery.
“Carmakers will be cursing a mix of factors stifling their ability to produce more vehicles, namely materials and labour shortages and increases to shipping costs. Manufacturers are absorbing the costs for now, but we could soon see price rises being passed on to consumers should problems persist, which runs the risk of dampening the sales recovery.
“Many carmakers find themselves in a bind between electric vehicles (EV) and traditional combustion engines. Despite some encouraging EV uptake among consumers, regular petrol cars are still popular because of their lower price point, with some remaining wariness over EV technology and reliance on charging. We can expect more calls from the industry for further government support to help produce the vehicles that will drive us towards a net-zero carbon future.”