UK car production drops to lowest in decades

Fewer than 860,000 vehicles rolled off British production lines last year, the lowest level in 65 years, as factories slowed down or stopped work due to a severe shortage of semiconductors. Other factors affecting production included widespread staff absences as workers were forced to go into isolation, the Society of Motor Manufacturers and Traders (SMTT) said.

According to the SMTT, total car production was 6.7% lower than in 2020 and 34% below pre-pandemic levels. Covid-19 disruptions triggered a global shortage of semiconductor chips, leading to an even worse 2021, it said. Semiconductors are a vital part of modern cars, with each vehicle typically having between 1,500 and 3,000 chips to operate.

The trade group’s chief executive Mike Hawes described 2021 as “a dismal year,” adding that “there's no hiding it.” However, he suggested that despite the miserable year there is optimism, largely because of almost £5 billion in planned new investments by the automotive industry, many of them in electric vehicles or technology. 

Hawes said the industry had managed to cope with the extra costs of Brexit, but warned that it still faces a growing challenge from a spike in energy costs of up to 70%. According to him, the industry urgently needed “measures to mitigate the escalating energy costs which are threatening viability,” because higher costs “will flow through to prices,” adding to pressure on consumers.

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