UK car production plummets to 13-year low in January

UK car production plummets to 13-year low in January

UK car production fell 20.1% to 68,790 units in January 2022. Photo: Phil Noble/Reuters

UK car production sank to its lowest January in a decade as semiconductor shortages continued to cause disruption, new figures from the Society of Motor Manufacturers and Traders (SMMT) showed.

Fewer than 68,800 cars left factories in January, down by 20% on a year ago and the worst figure for that month since 2009, the SMMT said.

Production for overseas and domestic markets fell by 17.5% and 30.8% respectively.

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Exports accounted for more than eight in 10 cars made, with the EU remaining the largest destination for UK-made cars, taking 59.1% of exports, followed by China (10.4%) and the US (10%).

The SMMT said the global shortage of semiconductors was still hitting production, as was the changeover to electric of some popular models.

Mike Hawes, SMMT chief executive, said: “It’s another torrid start to the year as global supply issues and structural changes squeeze output while model changes impact production scheduling.

“The UK automotive manufacturing industry is, however, fundamentally strong, and recent investment announcements are testament to the potential for growth, not least in terms of rising electric vehicle (EV) production.”

Battery-electric vehicle production went up by a third, with zero-emission vehicles accounting for one in 11 cars rolling off factory lines.

When plug-in hybrids and hybrids are factored in, EVs accounted for more than a quarter of last month’s output.

Read more: UK car production drops to lowest since 1956

KPMG’s head of automotive, Richard Peberdy, warned that record inflation and the cost of living squeeze might hit demand.

“The start of 2022 has certainly provided car makers with more confidence than this time last year in the industry’s ability to avoid paused production lines, closed showrooms and staff isolating,” he said.

“But they will be pondering whether the cost of living squeeze, which includes rising fuel prices and energy costs, begins to slow the demand that currently outpaces supply.”

The SMMT now estimates that 979,000 cars will be built in the UK in 2022, a 14.4% increase on 2021.

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