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March 25, 2022

UK car production down 41.3% in February

Eighth successive monthly year-on-year decline for UK car output as global chip shortage persists.

By David Leggett

UK car production fell 41.3% in February, with 61,657 units made, according to the latest figures released by The Society of Motor Manufacturers and Traders (SMMT).

The SMMT said the decline was primarily down to the persistent global shortage of semiconductors causing some factories to pause production, and the loss of output following the closure of Honda’s Swindon plant last summer.

In what was the weakest February for UK car makers since 2009, production declined for both the domestic and overseas markets, down 35.8% and 41.8% respectively.

Exports accounted for more than eight in 10 cars made, with the majority of shipments (62.4%) heading into the European Union, equivalent to 31,673 units. The US, in comparison, took 11.0% of exports, and China 8.7%.

The shift towards a higher proportion of electrified vehicles produced continued with plug-in hybrids, hybrids and battery electric cars combined representing more than a quarter (25.8%) of all production in the month, or 15,905 units.

Mike Hawes, SMMT Chief Executive, said: “The automotive industry is undergoing its most radical transformation in more than a hundred years, but manufacturers are simultaneously facing the most extreme operating conditions as global economic headwinds drive up costs and constrain supply. The sector entered 2022 hopeful for recovery, but that recovery has not yet begun, and urgent action is now needed to help mitigate spiralling energy costs and ensure the sector remains globally competitive to encourage the investment essential to growth, job security and the delivery of net zero ambitions.”

The SMMT noted that against an already tough economic backdrop, the Russian state’s invasion of Ukraine at the end of February represents a further challenge for the UK automotive sector.

Although, in 2021, Russia took just 1.1% of UK car exports and Ukraine just 0.5%, many critical raw materials, parts and components, including aluminium, palladium and nickel, which is used in battery manufacturing, and wiring harnesses, are sourced from the region. BMW’s Mini plant at Oxford was impacted this month by supply disruption to wiring harnesses sourced from Ukraine.

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