New data from the Society of Motor Manufacturers and Traders (SMMT) shows UK car production is still well below pre-pandemic levels (down 52.6% on the same month in 2019) despite a tenfold increase in May compared to the same month last year.
The SMMT says that 54,962 cars rolled off production lines in May compared to just 5,314 a year ago, when coronavirus halted manufacturing.
429,826 cars have been produced by factories so far in 2021, an increase of 105,063 units on last year. 95.3% of the additional volume were in fact built for export, but overall output remains down 22.9% on the same five-month period in 2019.
The SMMT believe its findings are a reflection of the current state of the industry; it is trying to recover from the pandemic while grappling with global supply shortages.
The computer chip crisis is impacting every car and van manufacturer, with some delivery times for cars lengthening from three to six months. Many new vans are now not expected to be delivered until 2022.
When compared with a five-year average, the SMMT data shows that production was down by more than half (58%) for the month and over a third (36.3%) for the period January – May 2021.
Commenting on the survey findings chief executive of the SMMT, Mike Hawes, said:
“May’s figures continue to look inflated when compared to last year’s near total standstill of production lines. The recovery of car production is, however, still massively challenged here and abroad by global supply shortages, particularly semiconductors.
“If the UK is to remain competitive, therefore, it must ensure it has a globally attractive policy framework for both vehicle production and the supply chain.
“Accelerating zero emission car production is part of this package, so while one in five models made here this year is alternatively fuelled, we need to drive investment in R&D, charging infrastructure and the market to ensure we can deliver the net zero future society demands”.
Meanwhile UK car production continues to be export-led, with 83.6% of all cars built so far in 2021 shipped overseas. The European Union remains by far the most important destination for British cars, taking 56.0% of all exports, followed by the US (18.3%) and China (7.3%).
UK head of automotive at KPMG UK, Richard Peberdy, said:
“Global inflationary pressures affecting materials like copper, steel and oil are adding to the well reported issues surrounding semiconductor supply, which continue to clip UK automotive output. And while the Covid-19 picture is improving, new outbreaks have forced some port shutdowns in China, creating new blockages in the global supply chain.
“Inventories have fallen to very low levels as production remains stifled and demand recovers. Carmakers are responding by focusing production on higher margin models, while developing and rolling out electric vehicles to safeguard market share and competitive positioning in this fast-growing part of the market.
“As EV production sustains momentum, it’s encouraging to hear that multiple manufacturers are in talks with the UK Government over the construction of gigafactories. This won’t impact production in the near term, but their development will be crucial for the future of the UK automotive sector given the prohibitive nature of shipping heavy batteries from overseas”.