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UK car production falls to lowest level since 1956

Professional Engineering

Stock image. UK car manufacturing fell to its lowest level since 1956 in 2021 (Credit: Shutterstock)
Stock image. UK car manufacturing fell to its lowest level since 1956 in 2021 (Credit: Shutterstock)

UK car production fell to its lowest level in 65 years in 2021, according to new figures released today by the Society of Motor Manufacturers and Traders (SMMT).

Production fell 6.7% to 859,575 units, the lowest total since 1956. Output was 61,353 less than 2020, which also was badly affected by coronavirus lockdowns, and 34% below pre-pandemic 2019.

“The overall poor performance can be attributed to several factors, most of them direct consequences of the pandemic,” an SMMT announcement said. “The shortage of semiconductors, a critical component in modern car manufacturing, was the principal cause of the decline, with factories having to reduce or even pause production while awaiting parts whose supply has been heavily constrained by the global pandemic.”

Manufacturers also wrestled with staff shortages caused by workers having to self-isolate, and depressed demand during extended closures of car showrooms. The July closure of Honda’s factory in Swindon also contributed to the fall, accounting for about a quarter of the annual decline.

Despite the drop, British car factories produced a record number of battery electric and hybrid vehicles, turning out almost a quarter of a million of the zero and ultra-low emission vehicles – more than one in four (26.1%) of all cars made. Battery electric vehicle production surged 72% and hybrids rose 16.4%.

Global exports continued to be the foundation for UK car manufacturing, with roughly eight in 10 cars being shipped overseas. Although annual production for overseas markets declined 5.8% to 705,826 units, volumes for the domestic market declined even more steeply, down 10.6% to 153,749.

“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,” said SMMT chief executive Mike Hawes.

“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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