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UK car production declined 9.8% in 2022 to 775,014 units, according to the Society of Motor Manufacturers and Traders (SMMT).

The lobby group said December “rounded off a volatile year” with output down 17.9% after growth in October and November with most of the year’s volume loss occurring in the first half.

The annual total was 84,561 units down on 2021 and 40.5% below the 1,303,135 cars made in pre-pandemic 2019, equivalent to a loss of over half a million cars.

The main reasons for the depressed output were the crippling global shortage of semiconductors, which limited the ability to build cars in line with demand, significant structural changes, reflecting a loss of production at two volume manufacturing sites (including Honda Swindon), and the impact of supply chain pauses in China due to Covid lockdowns.

Despite these challenges, UK factories turned out a record 234,066 battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) electric vehicles, with combined volume up 4.5% year on year to represent almost a third (30.2%) of all car production. Total BEV production rose 4.8%, with hybrid volume up 4.3%.

The figures come as fresh SMMT analysis confirms the increasingly important role of electrified vehicle production to the UK economy, especially the value of exports.

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By GlobalData

Since 2017, the value of BEV, PHEV and HEV exports has risen seven fold, from GBP1.3bn to more than GBP10bn. As a result, electrified vehicles represent 44.7% of the value of all UK car exports, up from a mere 4.1%. BEVs, in particular, are critical to the future prosperity of the UK, with their export value up more than 1,500%, from GBP81.7m to GBP1.3bn.

Total annual output for the UK market grew 9.4% but this was not enough to offset a 14% drop in exports. Nearly eight in 10 cars (606,838 units) were built for overseas markets, compared with 168,176 for British buyers.

The EU remained by far the sector’s largest market, even as shipments declined 10.0%, with 57.6% of exports (349,424 units) heading into the bloc. While exports to the US and China also fell, down 31.6% and 8.3% respectively, the number of cars sent to Japan (+5.7%), South Korea (+32.8%), Australia (+4.7%), Switzerland (+2.7%) and South Africa (+23%) all increased, although together these represented just 8.4% of exports. Exports to Russia, a top 10 export market in 2021, meanwhile, fell 78.3%, with shipments made before the outbreak of war in Ukraine and the cessation of business.

Mike Hawes, SMMT Chief Executive, said: “These figures reflect just how tough 2022 was for UK car manufacturing, though we still made more electric vehicles than ever before – high value, cutting edge models, in demand around the world.”