EV charge can’t offset production slump

UK car production fell for the third consecutive month in September, dropping 41.5% with 67,169 cars manufactured.

This makes it the worst performing September since 1982, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT).

Output continues to be hampered by the production stoppages caused by the ongoing global shortage of semiconductors as well as the loss of production capacity arising from the closure of one of the UK’s larger plants.

The news comes as SMMT reveals details of its member survey into the impact of the global shortage of semiconductors on the UK automotive sector and its vital supply chain. More than eight in 10 (83%) firms have been negatively impacted by the situation, primarily due to reduced orders, cost increases, logistical delays and disruption. It found the supply chain has spent more than £2.4bn to date managing additional costs which are unlikely to be recovered, with most (56%) not expecting supply constraints to improve until the third quarter of 2022 and more than a third (38%) having to reduce operating hours to cope with the challenge.

Around one in 10 firms have made redundancies and/or restructured their businesses as a direct result of the lack of semiconductors, while some six in 10 (65%) SMEs sought an extension to the Coronavirus Job Retention Schemes.

Despite the ongoing challenges, production of the latest battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) cars now represents almost a third (32.3%) of all cars made, equivalent to 21,679 units.

Mike Hawes, SMMT chief executive, said: The substantial decline in UK car output in September continues the worrying trend we have seen over the past three months. The industry is continuing to battle the effects of the pandemic with the shortage of semiconductors stalling production.

“Whilst there was welcome news in the Budget to support the transition to zero emission vehicle production, battery manufacturing and supply chains, it missed the opportunity to offer meaningful short-term support given Covid-related supply constraints and rising energy bills. This is disappointing given the sector’s importance and its ability to create well-paid jobs across the regions and the revenues it generates, notably from exports.”