The UK car manufacturing sector suffered its worst January for more than a decade as global microchip shortages continue to bite. According to figures from the Society of Motor Manufacturers and Traders (SMMT), the number of cars leaving UK factories in January was down by a fifth compared with the same month last year.
The SMMT data shows just under 69,000 new cars were built in this country during the first month of 2022, but that’s a 20.1-percent reduction compared with January 2021. Production for foreign and domestic markets was impacted, but the number of cars built for UK customers was down by almost a third.
In total, just over 11,500 new cars were built in the UK for domestic customers last month, down 30.8 percent compared with the same month in 2021. The remaining 57,000 or so cars were exported to foreign markets, but even that figure was down 17.5 percent compared with January last year.
The SMMT found a small crumb of comfort for environmentally minded onlookers, noting battery-electric cars now account for one in every 11 cars built on these shores. Add hybrid and plug-in hybrid cars to the mix, and these more eco-friendly vehicles make up more than a quarter (27.4 percent) of all the cars built in the UK.
However, that can’t mask the fact output is down by more than a fifth compared with a month that was, in itself, one of the worst Januarys on record. This time last year, the SMMT said volumes were being hit by “friction” in the post-Brexit trading arrangements, as well as extended shutdowns and the impact of the pandemic.
The SMMT says the current poor performance is down to a number of factors, including the continued worldwide shortage of semiconductors. Other, less harmful, factors cited by the organisation include the loss of volume caused by a major plant closure in July 2021 and “production variations” caused by the changing of some popular models.
Mike Hawes, the SMMT’s chief executive, was relatively upbeat, and said the industry was strong enough to weather the storm. However, he called on the government to address issues affecting competitiveness, including energy prices and trading costs.
“It’s another torrid start to the year as global supply issues and structural changes squeeze output while model changes impact production scheduling,” he said. “The UK automotive manufacturing industry is, however, fundamentally strong and recent investment announcements are testament to the potential for growth, not least in terms of rising EV production.
“Long-term recovery can only be delivered, however, if global competitiveness is assured and for that we must address both inflationary and fixed costs, most obviously escalating energy prices, but also fiscal and trading costs. Every measure must be taken if we are to secure a bright, electrified future for our world-class automotive manufacturing base and the high skilled, high value jobs it creates across Britain.”