9:03 am, July 27, 2023
The first half of 2023 saw UK car production rise by 11.7 per cent, new figures have revealed.
Data from the SMMT shows that 450,168 cars rolled of production lines in the six months to the end of June.
The sixth month of the year – up 16.2 per cent –was also the fifth consecutive month of growth as the industry continues to move on from the pandemic.
The half year results were the best since 2021 with global supply chain issues, including the semiconductor shortage, finally appearing to ease.
The news is another welcome shot in the arm for the UK’s motor industry, following last week’s positive news that JLR is to anchor its EV production in this country with a state-of-the-art new gigafactory, to be built in Somerset.
Breaking the latest figures down, since January, an additional 47,037 units have been built, compared to the previous six month window.
The rise has largely been driven by a 13.6 per cent surge in exports to 359,940 cars – around eight in every ten built.
The EU remains the UK’s largest export market accounting for 59.5 per cent of all British car shipments, up 11.2 per cent to 214,017.
Meanwhile, the next biggest export destinations include the US, China, Japan and Australia as well as Turkey, South Korea, Canada, the UAE and Mexico.
Exports to all of those markets rose, apart from the US, (down 0.1 per cent) and China, (down 6.4 per cent).
Meanwhile, UK volumes rose 4.5 per cent to 90,228 units.
However, despite the positivity, year-to-date output remains well down on pre-pandemic levels with production 32.5 per cent lower than in 2019.
Mike Hawes, SMMT chief executive, said: ‘UK car manufacturing is growing again, with production – especially of electrified models – increasing and major investment announcements making headlines.
‘This is testament to the resilience of the sector and its undoubted strengths – a skilled and productive workforce, world-class R&D, and efficient, productive plants.
‘But we must build on this momentum, sustain growth and attract further investments with a strategy that focuses on competitiveness and which strengthens the UK’s unique automotive offering.’
When it came to green motoring, production of hybrid electric, plug-in hybrid and battery electric vehicles rose 71.6 per cent from January to June to a record total of 170,231 units.
This represents more than a third (37.8 per cent) of all cars produced so far this year.
The SMMT recently warned against a delay in the 2030 ban on new petrol and diesel cars, which can be read here.
What do the experts say?
Paul Barker, managing editor at Carwow UK
It’s hugely encouraging to see the rate of UK car manufacturing accelerating for the fifth month running as we close H1. These figures are good news all round.
Following last week’s announcement of Tata Group’s investment into building a new gigafactory in the UK for batteries, it’s particularly pleasing to see that hybrid, plug-in hybrid and battery electric vehicle volumes are up a record-breaking 71.6 per cent from January to June.
With new and expanded low emission zones being introduced in cities across the country, and the Government staying firm on the deadline to phase out new petrol and diesel cars by 2030, a shift to these categories is essential.
The need for a widespread scale-up of the number of public charge points for electric vehicles remains vital – especially given the speed at which production of these cars is now occurring.
Richard Peberdy, UK head of automotive for KPMG
Increased car production volumes are clearing the backlog of car orders that built up over recent years of reduced supply.
But higher inflation and interest rates are pressuring business investment, at a time when key decarbonisation decisions are being taken, including new product and technology development or greening and on-shoring of supply chains.
Decisions taken now will shape the next decade of delivery for car manufacturers.
Increasingly, the automotive sector is looking at economic conditions globally and making moves now that they feel will serve them best in the medium to longer term.
Rules of origin changes in 2024 are one such consideration – and manufacturers on both sides of the Channel are hoping for an agreeable resolution that accounts for the battery manufacturing industry in Europe still being in its infancy.
Mark Tisshaw, editor, Autocar
As we can see from these statistics from SMMT, manufacturing and exports both continue to rise.
Hybrid and Electric vehicles now occupy a significant chunk of cars made in the month of June, which proves that industry has geared up its efforts to meet the 2030 cut-off point for the production of ICE vehicles in the UK.
Despite this progress, there are clearly challenges that need to be addressed around charging infrastructure and manufacturing capacity and authorities must do their bit to support the industry and consumers to make the switch to EVs that they have mandated.
The recent confirmation of Tata’s investment in a UK Gigafactory is welcome, but we need more initiatives like this if the UK wants to be a competitive manufacturing hub for batteries in the future.
Lisa Watson, director of sales at Close Brothers Motor Finance
As the SMMT data shows June has been yet another month of growth, highlighting the impressive strength and resilience in the UK’s motor manufacturing industry. As industry challenges such as supply chain disruptions begin to ease, manufacturers will be looking to restore production to pre-pandemic levels.
Moving forward into the second half of 2023 the outlook remains positive. Continual rises in car production levels should help expand the availability of options for customers to choose from.
This will also have a positive and much needed knock-on effect on the second-hand car market, where the availability of used stock under five years old remains 27% lower than the pre-pandemic figures.
With the cost-of-living crisis sticking around and digging deeper into people’s finances, it will be key for manufacturers to be mindful of customer demand, the affordability of products, and the impact of government legislation on buyer trends, whilst striving to ease the new car market’s supply shortfall.
