UK car production was down by more than a quarter in November as the global semiconductor shortage continues to impact factories. Figures from the Society of Motor Manufacturers and Traders (SMMT) show just under 76,000 new passenger cars rolled out of UK factories in November.
That figure represents a 28.7 percent drop compared with the same month last year, making it the worst November for the sector since 1984. The SMMT blamed the shortfall on the global chip shortage, which has severely impacted factories across the world and caused supply issues for the entire new car market.
After the disappointing output in November, the SMMT data shows just under 800,000 new cars have been built in the UK during the first 11 months of the year. That’s down 6.2 percent compared with the same period in 2020, when almost 850,000 new passenger cars were produced on these shores.
Between January and November 2021, the number of cars built for UK customers has fallen by just over 11 percent compared with the same 11 months of 2020, while the number of vehicles exported has fallen by just five percent. However, with exports making up more than eight in every 10 new cars built in this country, the five-percent drop represents a 35,000-car reduction in output.
Mike Hawes, the SMMT’s chief executive, said the figures were concerning for the industry, and the impact of the chip shortage is likely to be felt for months to come. And with impending changes to customs controls coming on January 1, he said the industry was depending on the government to ensure delays do not impact businesses.
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“These are incredibly worrying figures, underscoring the severity of situation facing the automotive industry,” he said. “Covid is impacting supply chains massively, causing global shortages – especially of semiconductors – which is likely to affect the sector throughout next year. With an increasingly negative economic backdrop, rising inflation and Covid resurgent home and abroad, the circumstances are the toughest in decades.
"With output massively down for the past five months and likely to continue, maintaining cashflow, especially in the supply chain, is of vital importance. We have to look to the government to provide support measures in the same way it is recognising other Covid-impacted sectors.
“The industry is as well prepared as it can be for the implementation of full customs controls at UK borders from 1 January but any delays arising from ill-prepared freight or systems will place further stress on businesses that operate ‘just in time’. Should any problems arise, contingency measures must be implemented immediately to keep cross border trade flowing smoothly.”