UK car production tumbles

UK car production tumbled in the first quarter, industry data showed on Thursday, as global supply chain issues weighed heavily.

According to the Society for Motor Manufacturers and Traders, car manufacturing declined by 32.4% year-on-year in the three months to March end, to 207,347 units. The SMMT said production had been constrained by the ongoing global shortage of semiconductors and other components.

Surging demand since the start of the pandemic for electronic items meant factories struggled to produce enough semiconductors, which are widely used in the production of modern cars. Rolling lockdowns in China have exacerbated the global semiconductor shortage, while the war in Ukraine and soaring costs have further impeded the supply of parts.

In the last month of the quarter, output fell 33.4% to 76,900 units – making it the weakest March since 2009 – following a decrease in production for overseas markets, which fell 41.4%.

Mike Hawes, SMMT chief executive, said: “Two years after the start of the pandemic, automotive production is still suffering badly, with nearly 100,000 units lost in the first quarter.

“Recovery has not yet begun, and with a backdrop of an increasingly difficult economic environment, including escalating energy costs, urgent action is need to protect the competitiveness of UK manufacturing.”

A total of 72.5% of cars made in the UK last month were built for export, with the majority going to the European Union following the US and China. Production for the domestic market increased modestly, by 4.3% or 864 additional units.

Over the course of the quarter, outputs for export and for the UK fell by 35% and 20.3% respectively.