7:03 am, March 30, 2023
Car production went up by just over 13 per cent in February helped by an easing of a two-year shortage of semiconductors, the SMMT said today.
The number of cars built in UK factories reached 69,707 last month – 8,050 more than the same month a year ago and a 13.1 per cent rise, reported the industry body.
The SMMT highlighted an improvement in supply chain shortages – notably of semiconductors – which it said had ‘bedevilled the global industry since the early months of 2021’.
Year to date, production was up six per cent on 2022, rising from 130,447 last year to 138,282 units this year.
Production for the home market rose by 20.3 per cent to 13,073 cars, while for overseas it went up by 11.5 per cent to 56,634, with most of these exports (59.6 per cent) going to the EU – the UK’s largest trading partner.
Shipments to the EU increased by 6.5 per cent, helping to offset declines to the US and China – down 19.9 per cent and 21.6 per cent respectively, which the SMMT said was further evidence of the need for continued free trade across the Channel.
Exports to Turkey, Japan, Australia and South Korea, meanwhile, also went up – by 85 per cent together – representing a total of 6,498 cars, or 11.5 per cent of exports.
The transition to hybrid, plug-in hybrid and battery-electric vehicles continued, with combined production surging by 72.2 per cent from 15,905 to 27,392, accounting for 39.3 per cent of cars produced last month.
SMMT chief executive Mike Hawes said: ‘February’s growth in UK car production signposts an industry on the road to recovery.
‘The fundamentals of the sector are strong: a highly skilled workforce, engineering excellence, a sector that is embracing new electrified vehicle manufacturing and wide-ranging capabilities in the EV supply chain.
‘To take advantage of global opportunities, however, we must scale up at pace and make the UK the most attractive destination for automotive investment by addressing trading and fiscal costs and delivering low-carbon, affordable energy.’
There are more than 25 manufacturing brands building over 70 vehicle models in the UK now, as well as various specialist small-volume manufacturers, according to the SMMT.
What the industry says
A gamble from manufacturers
As production recovers, the market seems to be taking a new shape.
Manufacturers are focusing more on higher-specification models in order to drive profit margins, with fewer available cars under £25k and many more priced £50k and higher.
This is a gamble from manufacturers that demand is consistent. We will see in the registration figures whether it pays off, despite the ongoing cost-of-living crisis.
What’s clear is that the industry is on the road to recovery as manufacturers start to restore production to pre-pandemic levels.
Lisa Watson, director of sales, Close Brothers Motor Finance
More government support needed
Despite the growth in output, vehicle manufacturing remains well below the pre-pandemic levels, and the concern is that unless significant change is announced by the UK government, that is where it will stay.
The latest manufacturing figures come two weeks after a Spring Budget which made little mention of increased investment in the UK automotive sector or plans to boost opportunities in the country for OEMs.
The UK is competing against other nations when it comes to electric vehicle assembly and battery manufacturing sites, and risks losing its status as a key manufacturing hub unless more government support is created.
Jim Holder, editorial director, What Car?
