UK vehicle output down 41% amid semiconductor shortage

The UK auto sector produced 64,726 vehicles in October, down 41.4% year on year to the weakest October since 1956 due to the ongoing semiconductor shortage leading to production stoppages, according to the latest data released by the Society of Motor Manufacturers and Traders Nov. 26.

The October volume brought total car production for the first 10 months of 2021 to 721,505 units, down 2.9% from 2020.

“The weak output totals compared to last year are exacerbated by the closure of a UK car plant at the end of July, a deficit that will impact figures for a year,” the SMMT said.

SMMT CEO Mike Hawes said the figures were “extremely worrying and show how badly the global semiconductor shortage is hitting UK car manufacturers and their suppliers.”

“Britain’s automotive sector is resilient but with COVID resurgent across some of our largest markets and global supply chains stretched and even breaking, the immediate challenges in keeping the industry operational are immense,” Hawes added.

He said that the UK government could help the sector with measures to boost competitiveness in line with global rivals, tackling high energy costs, supporting employment and training, and helping businesses with cashflow pressures.

On the positive side, 30.9% of the total output comprised battery, plug-in or hybrid electric vehicles, the SMMT said.

It noted that, with BEV manufacturing climbing 17.5% to 8,454 units, UK automakers had produced more than 50,000 zero emission vehicles in the first 10 months of 2021, bypassing the total manufactured during the whole of the pre-pandemic 2019.

October production for the domestic market fell 37.9% on the year to 11,608 units, while output for export markets decreased 42.1% to 53,121 vehicles.

Of the exports, 60% went to the European Union due to the Brexit deal allowing automotive trade with Europe to be tariff-free, the SMMT said and, although shipments to the EU fell 29.2%, exports to Japan and the US fell more by 57.1% and 67% respectively.

Over the 10-month period domestic output totaled 124,957 vehicles, down 10.4% year on year, while production for export dropped just 1.2% on the year to 596,548 units.

Commercial vehicle output up 17%

Meanwhile, 7,892 commercial vehicles were produced in the UK in October, up 17.2% year on year, although this was 6.9% below the five-year pre-COVID average, the SMMT data showed.

For the first 10 months of 2021 commercial vehicle output was up 15.6% on the year to 58,813 units, although this was 18% below the pre-pandemic average, due to the “pingdemic” staff shortages earlier in 2021 and the semiconductor shortage.

According to the SMMT, October production for the domestic market rose 29.8% on the year to 3,960 units, while output for export markets increased 6.8% to 3,932 vehicles.

Over the 10-month period domestic output totaled 28,525 vehicles, up 28.2% year on year, while production for export climbed 5.7% on the year to 30,161 units.

Throughout 2021, SMMT noted that the export share had decreased from 56.1% in 2020 to 51.3%, with output for UK buyers continuing to accelerate faster than those abroad.

Hawes said while October production had risen from 2020’s weak volumes, the sector was not immune from the ongoing challenges caused by the pandemic and the ongoing semiconductor shortage.

“There remains plenty of uncertainty in the months ahead. UK manufacturers are committed to doing all they can to keep production lines operational, getting more of the latest, cleanest CVs onto our roads, and boosting fleet renewal which will go a long way to improving air quality in urban areas,” Hawes added.

— Jacqueline Holman