8:37 am, September 30, 2021
UK car production fell by 27 per cent in August – the second consecutive month of decline, the SMMT has confirmed.
Figures show that just 37,246 were manufactured in what is traditionally a quiet month for the sector.
The numbers this year were particularly low – largely as a result of the global semiconductor shortage which is causing production stoppages.
The figures were also hit by the timing and length of some manufacturers’ summer factory shutdowns, the SMMT found.
Despite the challenges, production electrified vehicles skyrocketed and now represent over a quarter of all cars made.
An incredible 27.6 per cent of the cars built in August where either battery electric (BEV), plug-in hybrid (PHEV) or hybrid (HEV).
That is the equivalent to 10,274 units.
It means UK car factories have turned out 137,031 alternatively fuelled cars since January – 51,679 more than the same period in 2020.
While manufacturing for the UK market increased 3.3 per cent in the month, the rise was equivalent to just 255 additional units.
Elsewhere, exports fell dramatically, with just 29,200 cars shipped overseas – a slump of 32.5 per cent.
The decline driven by falling exports to faraway markets including Australia, the US and China, which were down 74.9, -65.7 and 58.7 per cent respectively.
Exports to the EU held up better, down 4.9 per cent, accounting for almost seven in every 10 cars exported in August.
Despite August’s struggles, production throughout the year remains 13.8 per cent higher than in 2020.
A total of 589,607 cars had been made up until the end of August, driven by exports with 83.2 per cent of everything made heading for markets abroad
The performance, however, is still 32.0 per cent down on the pre-pandemic 2019.
Mike Hawes, SMMT chief executive, said: ‘Another significant decline for UK car production is extremely worrying both for the sector and its many thousands of workers nationwide.
‘While not the only factor at play, the impact of the semiconductor shortage on manufacturing cannot be overstated.
‘Carmakers and their suppliers are battling to keep production lines rolling with constraints expected to continue well into 2022 and possibly beyond.
‘Job support schemes such as furlough have proven such a lifeline to automotive businesses yet its cessation today comes at the worst time, with the industry still facing Covid-related stoppages which are damaging the sector and threatening the supply chain in particular. Other countries have extended their support; we need the UK to do likewise.’
Figures highlight ‘crippling’ impact of microchip shortage
Industry insiders say the decline shows the full impact of the ongoing semiconductor crisis.
Jim Holder, editorial director of What Car? described them as a ‘major concern’ and admitted the outlook was ‘bleak’.
He said: ‘August is typically a quiet month for the sector, but this year’s results underline again the crippling impact of the ongoing microchip shortage, and demonstrate how it is undermining the car industries ambitions to bounce back from the impacts of Covid-19.
‘Waiting times for some models have now been pushed beyond a year, making it difficult for retailers to manage customer expectations and demand.
‘Our own research shows just 13 per cent of new car buyers are willing to wait more than 16 weeks for their next car before they consider alternatives.
‘However, while these figures are a major concern for everyone working in and around the industry and consumers, it looks like there is worse to come, as the chip shortage intensifies.
‘There appears to be no hope of it easing until the turn of the year, and even the most optimistic predictions are for a return to normality from midway through 2022.
‘That bleak outlook threatens to undermine what in almost every other respect should be a thriving marketplace.’
