UK car production falls to its lowest level since the 1950s

UK car production fell to its lowest level in more than half a century in 2022 after a year of supply chain disruptions and a spate of plant closures.

The number of cars produced fell 9.8 percent to 775,014, its worst year since 1956, according to figures released Thursday by the Society of Motor Manufacturers and Traders.

While global industry is still paralyzed by a global semiconductor shortage and sporadic parts shipments from China, multiple plant closures in the UK over the past two years have further depressed numbers.

Honda’s Swindon plant, which produced about 100,000 models a year, closed in 2021, while the Stellantis site in Ellesmere Port halted production of the Vauxhall Astra last year in preparation for manufacturing a new electric van that will be launched in will begin this year.

Several plants were hit by supply chain issues during the year, with BMW’s Mini plant hit by the supply of Ukrainian-made wire harnesses following the Russian invasion. Several plants were also hit by parts shortages from China, where factories had to shut down suddenly due to Covid-19 shutdowns.

Additionally, sales to Russia – which was among the top 10 export markets in 2021 – halted earlier in the year following the invasion of Ukraine.

Struggling to secure enough chips to manufacture their vehicles, automakers have prioritized the most profitable models. While this helped some UK factories like VW’s Bentley and BMW’s Rolls-Royce, it may have hurt Toyota, which makes its larger models overseas.

Production is expected to pick up again this year as the global chip shortage eases and the Ellesmere Port plant restarts.

But even with a projected 15 percent increase in auto production, the total volume will still be 40 percent lower than before the pandemic, the SMMT said.

“We’re entering this year with some optimism,” said Mike Hawes, chief executive of SMMT. “2020 was bad, 21 was worse and 22 was even worse. The only way is up from here.”

UK van production, based largely at Stellantis’ own Luton plant, was a bright spot last year, up 40 per cent on strong global demand.

Electric and hybrid vehicles were another highlight and now account for a third of total production. Led by the electric Mini, the Nissan Leaf and the hybrid Toyota Corolla, the number of these low-emission models rose by 40 percent to 234,000.

The SMMT forecasts that UK factories will not reach 1m vehicles per year until at least 2025, based on independent forecasts.

The number, which is still ambitious given last year’s numbers, is half of the long-term target of 2 million vehicles the industry set in 2015, when auto production was at record levels.

That year Nissan also overtook Jaguar Land Rover to become Britain’s largest automaker, helped by both its electric Leaf car and a sharp decline in JLR’s own production.

https://www.ft.com/content/97eacb37-58e7-4b9a-ab1e-b1ba2ba9c427 UK car production falls to its lowest level since the 1950s

Adam Bradshaw

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