Chips still down for car industry

The recovery of car production in the UK is being hampered by a lack of staff and the global shortage of chips.

This is according to the Society of Motor Manufacturers, which reported that UK car factories turned out 69,097 units in June, the worst June total since 1953. Meanwhile the six-month total of 498,923 units is down 38.4% on the five-year, first-half average, representing a loss of 311,160 cars worth more than £8.5bn.

Exports continued to sustain British car manufacturing with 83.4% models made here so far this year shipped overseas.

However, UK production of battery electric (BEV), plug in hybrid (PHEV) and hybrid electric (HEV) vehicles remained steady year-to-date with around a quarter (22.6%) of all cars alternatively fuelled.

Mike Hawes, SMMT chief executive, said, While the UK automotive industry continues to suffer the effects of the global pandemic, with first half year production down significantly and a tough few months looming, the sector has the capability to recover. The latest investments into new models and battery production show a bright future is within reach, yet the industry still faces headwinds most notably from global semiconductor shortages and staff absenteeism as a result of staff being ‘pinged’.

“Businesses have ensured their facilities are Covid-secure but urgent action is needed, such as bringing forward the 16 August target date for exempting fully vaccinated adults from self-isolation and introducing a ‘test to release’ scheme to support those employees not yet fully vaccinated.

“Operating conditions are still challenging, however, highlighting the need for specific actions to help competitiveness, such as creating a Build Back Better Fund and the alleviation of high energy costs, to get the sector back on track and towards the volumes that make UK facilities viable.”