That's despite lockdown restrictions that have reduced demand.
UK car production was down just four percent during the first three months of 2021, despite demand being stifled by the coronavirus pandemic. Data from the Society of Motor Manufacturers and Traders (SMMT) shows March was particularly strong compared with the same month last year, although production that month was impacted by the arrival of the first coronavirus lockdown.
According to the SMMT’s figures, more than 306,000 new cars were built in this country during the first three months of 2021. That’s down slightly on the 319,000 built during the same period in 2020, but with demand still below normal levels, it’s an encouraging statistic for those in the industry.
However, the figures are lightly massaged by the impact of the first coronavirus lockdown in late March 2020. Just 78,767 new cars rolled off production lines that month as factories were forced to shut, leaving production down by more than 37 percent compared with March 2019. In comparison, around 115,500 cars were built in the UK during March 2021 – the first year-on-year increase in more than a year and a number that’s far closer to the March 2019 figure of 126,000.
In fact, it’s probably fairer to compare the first quarter of 2021 with the same period in 2019 – a time before anyone knew the meaning of the words ‘furlough’ or ‘R number’. That period saw just over 370,000 cars leave UK factories, while 306,000 new cars left the factory gates in the same period this year.
While that’s a noticeable 17-percent difference, optimists in the industry may see that as positive considering the lockdown in place during 2021. According to the SMMT’s new car registration data, the lockdown caused first-quarter new car sales to fall 12 percent compared with 2020 and around 40 percent when compared with the first three months of 2019.
Given the huge drop in domestic demand and the slump in demand from foreign customers brought on by the pandemic, there is perhaps room for optimism. However, the SMMT’s chief executive, Mike Hawes, lamented the impact of coronavirus on UK production and urged the government to create a “competitive business environment” for the sector in order to guarantee its survival.
“The first rise for UK car production since summer 2019 is a major step in the right direction but belies the underlying situation,” he said. “With factories shut for much of March 2020, output was always going to be up, but it remains below average, with some £11bn worth of production lost over the past year. Whilst the Covid situation is improving in the UK and in some major export markets, manufacturers are still struggling to manage residual issues, most notably the global semiconductor shortage.
“The shift towards electrified vehicle production is fundamental to the future of this vital sector. Securing investment for this transformation will depend on the global competitiveness of our industry. Companies are already having to absorb additional costs arising from our new trading arrangements with the EU, but must also invest in new technologies, new processes and upskilling the workforce. A competitive business environment that helps reduce operating costs and policies that support manufacturing will be essential if the transition to zero is to be Made in the UK.”