The number of cars built in the UK in 2021 was 6.7 per cent fewer than in 2020 and 34 per cent down on pre-pandemic levels
Car production in the UK saw its worst year since 1956 in 2021, with only 859,575 units built. This represents a decline of 6.7 per cent compared with 2020 and a devastating 34 per cent fewer cars manufactured than in pre-pandemic 2019.
The ongoing global shortage of semiconductor chips – between 1,500 and 3,000 of which are used in the manufacturing of a typical modern car – was the main problem, causing factories to reduce or even pause production.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders (SMMT) which published the figures, predicted this issue would begin to significantly ease in the second half of 2022, but could potentially still have an impact in 2023.
Another effect of Covid-19 was self-isolation leading to staff shortages throughout the year, while closed showrooms due to lockdown measures led to depressed demand at points, too. The pandemic wasn’t the only cause of problems, though, with the closure of Honda’s plant in Swindon accounting for around a quarter of the year’s decline.
The good news is that British factories turned out a record number of alternatively fuelled vehicles (EVs and hybrids) in 2021 – 224,011 rolled off production lines throughout the year. This represented 26.1 per cent of all new cars built.
Production for overseas markets was down 5.8 per cent to 705,826 units, while volumes for the domestic market fell 10.6 per cent to 153,749 units. The EU accounted for 55 per cent of all exports, followed by the US, China and Japan.
The SMMT added that, as a result of the signing of the Trade and Cooperation Agreement (TCA), publicly announced investment for the automotive industry reached a potential £4.9 billion in 2021, which was the highest total since 2013. This included investment announcements in Ellesmere Port, Halewood, Norfolk, Sunderland and Surrey.
Hawes commented: “2021 was another incredibly difficult year for UK car manufacturing – one of the worst since the Second World War, which lays bare the exposure of the sector to structural and, especially, Covid-related impacts.
“Despite this miserable year, there is optimism. With Brexit uncertainty largely overcome with the TCA deal, investments have been unleashed, most of which will help transform the sector to its zero-emission future.
“This is a vote of global confidence in the UK, but must be matched by a commitment to our long-term competitiveness; support for the supply chain in overcoming parts shortages, help with skills and training and, most urgently, measures to mitigate the escalating energy costs, which are threatening viability.”
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