Data published by the Society of Motor Manufacturers and Traders (SMMT) this week shows that UK production of cars fell to its lowest level since 1956 at 859,575 and lower even that 2020 when car production virtually stopped for about 6 weeks.
It is estimated that about a quarter of the decline arose from the closure of the Honda factory in Swindon but otherwise, Covid related reasons are the main driver. The global chip shortage is a major part of this with staff shortages arising from the need to self-isolate and depressed demand because car showrooms were closed during lockdown periods also important factors.
By manufacturer, Jaguar Land Rover returned to top spot, mainly because Nissan saw a larger fall from the 2020 level of production. Mini and Toyota which are 3rd and 4th in the list reported an increase in production in 2021 but there were falls for Honda with the closure of their factory and Vauxhall.
The share of UK car production for export edged up to 82% in 2021 although the number of vehicles was -6% lower at 705,826. Of this, 55% went to the European Union with the other major destinations being the USA (17%) and China (8%); the latter represented an increase in units compared to 2020.
One piece of important news is that there was a sharp increase in the production of electric vehicles – battery, plug-in hybrid and hybrid – which meant that this group accounted for more than ¼ of the total number of cars emerging from UK factories. The SMMT announcement also points to significant investment announcements across the country, many of which are in support of the production of electric vehicles.
The production of engines fell by -11% compared to 2020 with a particularly weak end to the year in December where production was -26% lower than the previous year. The main driver is again the shortage of electronic components although this is mainly because it reduced the number of cars being built and thus needing engines. Of course, as this is a count of the number of internal combustion engines produced, the move to battery electric vehicles will also have an impact on these numbers (hybrids of various types retain an IC engine).
We don’t normally report the figures for commercial vehicles as they are relatively small but it is worth noting that UK production increased by +11.3% compared to 2020 to 73,600, although it still remains short of the totals achieved before the pandemic. This increase came entirely in the home market which was +27% higher than in 2020 and the best figure since 2016, while exports fell by -1%. The split between home and export markets was almost back to the parity that we saw in 2015 with a ratio of 49:51 being recorded last year.
You can get the full details of the SMMT announcements by accessing the news stories on their website at https://www.smmt.co.uk/category/news/manufacturing/.