UK car production falls to worst levels since 1984

UK car production fell 28.7% in November to 75,756 units, according to the latest figures released on Thursday by the Society of Motor Manufacturers and Traders (SMMT).

It was the fifth month of declines in a row, and represented the worst November performance since 1984, as UK car makers continued to wrestle with a worldwide shortage of semiconductors.

The figures also reflected the loss of output arising from the closure of a UK car factory in the summer - a situation that the industry body said would impact year-on-year comparisons until July 2022.

In November, production for both domestic and overseas markets declined, by 18.8% and 30.4% respectively, as 30,487 fewer cars rolled off factory lines.

Exports accounted for more than 80% of all cars produced last month, which the SMMT said reinforced the need for smooth international trade, especially with the European Union, as new customs controls with the bloc were looming on 1 January.

The SMMT said 60.3% of cars shipped overseas in November headed into Europe, while Asia took 15.6% of UK car exports, the US 13.4% and Australia 1.2%.

Continuing the recent trend, British production of battery electric, plug-in hybrid and hybrid cars took a record share of production, accounting for 32.7% of all cars made in the month, and 25.5% over the year-to-date.

Battery electric vehicle output in particular was up in November, rising 52.9% to 10,359 units, hitting a new high of 13.7% of all production - more than double the level a year ago.

Year-to-date, UK car plants had turned out 797,261 units by the end of the month, which was around 432,794 less than pre-pandemic levels in 2019, and 667,441 off the five-year pre-Covid average of 1,464,702 cars.

“These are incredibly worrying figures, underscoring the severity of the situation facing the automotive industry,” said SMMT chief executive Mike Hawes.

“Covid is impacting supply chains massively, causing global shortages - especially of semiconductors - which is likely to affect the sector throughout next year.

“With an increasingly negative economic backdrop, rising inflation and Covid resurgent home and abroad, the circumstances are the toughest in decades.”

Hawes said that with output “massively down” for the past five months and likely to continue, maintaining cash flow, especially in the supply chain, was of vital importance.

“We have to look to the government to provide support measures in the same way it is recognising other Covid-impacted sectors.

“The industry is as well prepared as it can be for the implementation of full customs controls at UK borders from 1 January but any delays arising from ill-prepared freight or systems will place further stress on businesses that operate ‘just in time’.

“Should any problems arise, contingency measures must be implemented immediately to keep cross border trade flowing smoothly.”