Car production stunted by supply issues

UK car production dropped 19.2% in the first six months of the year, according to figures published today by the Society of Motor Manufacturers and Traders (SMMT).

It found that 95,792 fewer vehicles were built compared with the same period in 2021, with the total figure of 403,131 units making it the weakest first half since the pandemic-ravaged 2020 and worse than 2009 when the global financial crisis decimated demand.

However, June marked the second consecutive month of increasing car production in the UK, up 5.6% with 72,946 units built – although output remains 33.2% below 2019 levels.

Meanwhile, the production of battery electric vehicles (BEVs) remains a bright spot for the sector, with 32,282 produced in the first half of the year, an increase of 6.5%. This was bolstered by a 44.2% rise during June resulting in a record output of zero emission vehicles for the month.

Mike Hawes, SMMT chief executive, said: “Car manufacturers have been suffering from a ‘long Covid’ for much of 2022, as global component shortages undermine production and put supply chains under extreme pressure. Key model changeovers and the closure of a major plant last year have also impacted output, but there are grounds for optimism with rising output over the last two months. As these issues recede over the next year or two, investment in new technologies and processes will be essential but this will depend on our underlying competitiveness. Sky-high energy costs, non-competitive business rates and skills shortages must all be addressed if we are to build on our inherent strengths and seize the opportunities presented by the dash for decarbonised mobility.”