UK car production falls to 65-year low as chip shortage bites

UK car production declined by 41.4% in October as factories turned out 64,729 units, according to the latest figures released today by the Society of Motor Manufacturers and Traders (SMMT), Report informs, citing Motor Trader.

SMMT CEO Mike Hawes described the decline as “extremely worrying,” reflecting the damage that the shortage of semi-conductors has inflicted on vehicle supply over the past year.

It was the fourth straight month of decline and the weakest October since 1956, the year of the Suez crisis, as firms grappled with the global shortage of semi-conductors, which led to production stoppages.

Production of the latest battery-electric (BEV), plug-in hybrid (PHEV), and hybrid (HEV) vehicles comprised 30.9% of all cars made in October.

BEV manufacturing rose 17.5% to 8,454 units, meaning that, so far this year, UK car makers have produced more than 50,000 zero-emission vehicles, exceeding the total built in the whole of the pre-pandemic 2019.

Production for domestic and overseas markets fell by double digits in the months, down 37.9% and 42.1%, respectively.

Year-to-date output is below 2020, down 2.9% to 721,505 units. The latest independent production outlook report forecasts UK car and light commercial vehicle (LCV) production to be below one million for the second consecutive year, but to then recover to over one million in 2022, with the potential to reach 1.2 million in 2024 if competitive conditions prevail.

Mike Hawes, SMMT Chief Executive, said: “These figures are extremely worrying and show how badly the global semi-conductor shortage is hitting UK car manufacturers and their suppliers.”