UK car production slumps to lowest level since 1956
The lowest number of cars rolled out of British factories last year since 1956, as the industry warned that rising energy costs and further shortages of computer chips will plague its recovery.
Car production slumped across the UK and the world in 2020 as the coronavirus pandemic swept across the globe, but many in the industry had expected a rapid improvement. Instead, the disruption triggered a global shortage of semiconductor chips, leading to an even worse 2021.
Total UK car production fell by 6.7% to just under 860,000, according to the Society of Motor Manufacturers and Traders (SMMT), the industry lobby group. Its chief executive, Mike Hawes, described it as “a dismal year”, with output down by more than a third on 2019.
Jaguar Land Rover’s output for the year fell by a 10th compared with the year before, but the carmaker managed to regain its title as the UK’s largest manufacturer, after briefly losing out to Nissan in 2020.
Hawes said the industry had managed to cope with the extra costs of Brexit, although he added that executives were watching recent delays at the Dover Channel crossing.
However, Hawes warned that energy price increases that have also hit households were set to add further to UK carmakers’ difficulties. He said the industry urgently needed “measures to mitigate the escalating energy costs which are threatening viability,” and warned that higher costs could feed through to higher prices.
Factories are braced for price increases of up to 70% when old contracts expire. Energy is generally carmakers’ third-highest cost, after materials and labour, but the sector is lobbying to be designated as an energy-intensive industry in order to qualify for extra government support.
Nevertheless, Hawes said the
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