UK automotive output down by 100,000 cars as supply chain issues continue to bite
The UK automotive production was down by 100,000 cars in the first quarter of 2022 as a combination of pandemic-induced supply chain issues and the war in Ukraine continued to bite.
According to data by the Society of Motor Manufacturers and Traders (SMMT), output declined by 32.4 per cent on 2021 levels, going from 306,558 to 207,347 new vehicles registered.
The fall is largely due to fuel and diesel car production going down as battery electric vehicles (BEVs) made 7.5 per cent of the UK total output for the quarter, up 1.1 and 4.3 per cent on last year and 2019 levels respectively.
March 2022 was the weakest for the last 13 years, as production fell by 33.4 per cent year-on-year after UK automotive exports went down 41.4 per cent.
Exports to the US have been hit the hardest, which are down 63.8 per cent on last year. This is largely due to Honda’s decision to close the Swindon production plant last year, which manufactured vehicles primarily for the American market.
Exports to the EU declined by 24.5 per cent.
“Two years after the start of the pandemic, automotive production is still suffering badly, with nearly 100,000 units lost in the first quarter,” said SMMT’s boss Mike Hawes.
“We want the UK to be at the forefront of the transition to electrified vehicles, not just as a market but as a manufacturer so action is urgently needed if we are to safeguard jobs and livelihoods.”
While productions volumes have been constricted because of Covid-induced global semiconductor shortages for the last two years, the war in Ukraine exacerbated the situation by making supply parts and freight costs more expensive.
Last month, Volkswagen’s global output for 2022 was thrown into question following a shortage of Ukraine-produced wire harnesses, while Mercedes warned yesterday the war as well as new lockdowns in China could hinder production.
Commenting on the data, Sean Kemple, managing director at automotive finance firm Close Brothers Motor Finance, said: “The ongoing shortages means the next few months will continue to be a ‘watch and wait’ situation, but we shouldn’t lose lose, the car industry is buoyant.”