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January 28, 2021

UK car production down 29.3% in 2020

UK car manufacturing output fell 29.3% in 2020 to 920,928 units, the lowest total since 1984 as the industry was hit by lower global demand due to the pandemic.

By Sam Duke

UK car manufacturing output fell 29.3% in 2020 to 920,928 units, the lowest total since 1984 as the industry was hit by lower global demand due to the pandemic.

Data issued by the SMMT showed production for UK and overseas markets declined 30.4% and 29.1% respectively, but with more than eight in 10 cars exported.

Forecasts for 2021 point to some recovery, with UK car output projected at around one million units this year. However, much depends on an easing of the health emergency around the world and returning economic growth and confidence.

Manufacturing operations were severely disrupted throughout 2020, with lockdowns and social distancing measures restricting factory output.

Production for overseas buyers fell 29.1% in the year, to 749,038 units, while output for the UK also fell in double-digits, down 30.4% to 171,890.

Reinforcing the importance of avoiding 'no deal' tariffs with Europe, the EU remained the UK's biggest export destination, taking a 53.5% share, despite volumes falling 30.8% to 400,460 units.

Elsewhere, trade with most of the UK's other key export partners declined in line with the tough market conditions resulting from the pandemic. Shipments to the US, Japan and Australia all fell, down 33.7%, 21.6% and 21.8% respectively.

Exports to China, however, ended the year up 2.3%, and those to South Korea and Taiwan also rose 3.6% and 16.7% respectively as these nations travelled on different trajectories in dealing with Covid.

Despite the overall gloom, the UK continued to rollout battery electric (BEV), plug-hybrid (PHEV) and hybrid vehicles (HEV) to buyers at home and around the world. Combined production of these models rose to 18.8% of all cars made in Britain, up from 14.8% a year before, with BEVs increasing to a 4.5% share, up from 3.4%. The UK turned out 172,857 alternatively fuelled vehicles, with 79.6% of these exported.

Mike Hawes, SMMT Chief Executive, said: "These figures, the worst in a generation, reflect the devastating impact of the pandemic on UK automotive production, with Covid lockdowns depressing demand, shuttering plants and threatening lives and livelihoods. The industry faces 2021 with more optimism, however, with a vaccine being rolled out and clarity on how we trade with Europe, which remains by far our biggest market.

"The immediate challenge is to adapt to the new conditions, to overcome the additional customs burdens and regain our global competitiveness while delivering zero emission transport. We will continue to work with Government to attract investment in battery production and supply chain transformation as we transition to smart and sustainable mobility, supporting jobs and driving economic growth nationwide."

The SMMT said that 2020 saw GBP3.23bn of automotive investment publicly announced for the UK. However, over 80% of this amount was attributable to one company committing to a battery Gigafactory (Britishvolt).

Others includes Citroen and Peugeot products made at IBC Luton and Suzuki product manufactured at Toyota Burnaston

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