Car production up for third consecutive month – but ‘urgent’ action needed over energy costs

Car production in the UK rose for the third consecutive month in July, according to new figures from the Society of Motor Manufacturers and Traders (SMMT) – but the organisation warned that urgent action is needed to mitigate the “alarming” rise of energy costs.

In a sign that component shortages may finally be beginning to ease, factories turned out 4,605 additional units compared to the same month last year, up 8.6% to a total of 58,043.

Despite the increase, the SMMT said today’s (25 August) figures must be set in context. Output remains below pre-pandemic levels, down 46.4%. July 2021 was also the worst July since 1956, as carmakers faced the global shortage of semiconductors and staff absences arising from the ‘pingdemic’, forcing some to change summer shutdown timings.

Production for the UK surged 40.7% in July 2022, with exports also up by a more modest 2.8%. Shipments continue to drive the sector, accounting for eight out of 10 cars made.  

Almost a third (29.9%) of all cars made in July were either battery electric (BEV), plug-in hybrid (PHEV) or hybrid electric (HEV), amounting to 17,356 units, with BEV volumes up 65.9%.

Despite three months of growth, year-to-date UK car production is 16.5% below the same period in 2021, a decrease of 91,187 units. The decline is because of supply chain shortages, structural changes and weak exports, the SMMT said.

“A third consecutive month of growth for UK car production is of course welcome and gives some hope that the supply chain issues blighting the sector may finally be starting to ease,” said SMMT chief executive Mike Hawes.

“But other challenges remain, not least energy costs which are increasing at alarming rates. If we are to attract much-needed investment to drive the production of zero-emission vehicles, urgent action is needed to mitigate these costs to make the UK more competitive for manufacturing. This must be a priority for the next prime minister else we will fall further behind our global rivals, risking jobs and economic growth.”

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