Last year was branded a “dismal” one for the UK car car industry after figures showed production was down by almost seven percent on 2020. Data from the Society of Motor Manufacturers and Traders (SMMT) revealed just under 860,000 new passenger cars were built on these shores in 2021.
The organisation, which represents the nation’s car makers and dealers, says that figure is down 6.7 percent compared with 2020. Perhaps more worryingly, production fell by more than a third (34 percent) compared with the last pre-pandemic year of 2019. In fact, the SMMT says 2021 was the worst year for UK car manufacturing since 1956.
Production was down for domestic and foreign markets, with around 154,000 cars built for customers in the UK – down 10.6 percent on 2020. The export market performed slightly better, with production down by 5.8 percent and about 705,000 cars built. That said, production was still around 50,000 units lower than in 2020.
The SMMT is blaming the poor performance on the fallout from the coronavirus pandemic, claiming the global shortage of semiconductors, a critical component in modern car manufacturing, was the “principal cause”. The shortage meant factories had to reduce or even pause production while waiting for the necessary parts to arrive.
At the same time, manufacturers had to deal with staff shortages arising from self-isolation and reduced demand from customers after showrooms were effectively closed in the early part of the year. And non-Covid issues also copped a share of the flak, with the closure of the Honda factory in July 2021 accounting for a quarter of the annual decline.
Mike Hawes, the SMMT’s chief executive, said there was still room for optimism thanks to free-trade agreements including the Trade and Cooperation Agreement (TCA).
“2021 was another incredibly difficult year for UK car manufacturing; one of the worst since the Second World War, which lays bare the exposure of the sector to structural and especially Covid-related impacts,” he said.
“Despite this miserable year, there is optimism. With Brexit uncertainty largely overcome with the TCA deal, investments have been unleashed, most of which will help transform the sector to its zero-emission future. This is a vote of global confidence in the UK but must be matched by a commitment to our long-term competitiveness; support for the supply chain in overcoming parts shortages, help with skills and training and, most urgently, measures to mitigate the escalating energy costs which are threatening viability.”
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