The UK’s car manufacturing sector was hit by the global microchip shortage yet again in September, with output down by more than 40 percent. According to figures from the Society of Motor Manufacturers and Traders (SMMT), a mere 67,169 new cars were built on these shores last month.
That figure represents a 41.5-percent drop compared with the same month last year, when more than 114,000 new cars were produced in the UK despite the coronavirus pandemic. The SMMT’s figures also mean last month was the worst September for UK car production since 1982.
With that, the total output for the first nine months of 2021 stands at just under 657,000 cars – up 3.8 percent on 2020’s output. However, last year saw factories shuttered at the height of the first coronavirus lockdown, so those figures are nowhere near as impressive as they might otherwise appear.
According to the SMMT, the bleak-looking figures are down largely to the global semiconductor shortage that has had an impact on production worldwide. In the UK, the shortage has caused factories to stop production as cars cannot be built without the vital microchips.
However, the SMMT also says September’s poor performance was due to the closure of the Honda factory in Swindon, Wiltshire, where the Civic hatchback was built. The long-running plant ceased production at the end of July, with the loss of 3,000 jobs.
The SMMT’s latest figures follow the organisation’s member survey into the impact of the semiconductor shortage on the UK automotive sector. The research found 83 percent of firms have been “negatively impacted” by the shortage, while around one in 10 firms have made redundancies or restructured the business as a result.
The study also found the UK automotive supply chain has spent more than £2.4 billion managing additional costs that are unlikely to be recovered. More than half (56 percent) of the businesses questioned said they did not expect supply constraints to improve until the third quarter of 2022.
“The substantial decline in UK car output in September continues the worrying trend we have seen over the past three months,” said SMMT chief executive Mike Hawes.
“The industry is continuing to battle the effects of the pandemic with the shortage of semiconductors stalling production. While 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.”