UK car output sees 68-year low in June

UK carmakers produced 69,097 units in June, up on the Covid-19-hit June 2020 but still the worst June output since 1953 as the global chip shortage continued to hamper activity, says the Society of Motor Manufacturers and Traders (SMMT).

Output in the first half of 2021 was 498,923 units, down 38.4% on the five-year, first-half average, representing a loss of 311,160 cars worth more than £8.5 billion. The pandemic, new trading rules with the EU and supply issues caused ongoing challenges.

Exports continued to sustain British car manufacturing, with 83.4% of H1 output shipped abroad. Almost 52% went to the EU, followed by 19% to the US and 8% to China.

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

“However, with the looming end of sale date for new petrol and diesel cars less than nine years away, the industry is challenged to accelerate the transition from fossil fuel to zero emission vehicles,” SMMT says in a note seen by Kallanish. “This will require significant investment into vehicle manufacturing, battery production and supply chain transformation for which a clear commitment to enhancing UK automotive competitiveness is essential.”

Despite the easing of Covid-19 restrictions, manufacturers are experiencing staff shortages due to self-isolation arising from notification of contacts outside the workplace. This is putting production at risk and is another drag on the sector’s recovery, the organisation observes. The negative impact on planned UK car production, primarily due to the worldwide shortage of critical semiconductors, could be as much as 100,000 units this year.

Adam Smith Germany