UK car production slumps to lowest level since 1956

The SMMT said 2021 was ‘a dismal year’, with output down by more than a third on 2019

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 industry was approaching 2022 with “a lot more optimism”, particularly as the supply of semiconductors rises to meet demand after earlier investments by chip manufacturers. He said he expected the industry to return to 1m cars produced annually on a consistent basis – although he added that a return to the more than 1.7m cars built in 2016, the year of the Brexit referendum, was unlikely without new manufacturers choosing the UK.

The SMMT did highlight £4.9bn in investment announced during the year by the automotive industry – although that included the speculative announcement of £2.5bn by Coventry council in a battery factory project that is yet to attract a lead investor.

The number of battery electric cars with zero exhaust carbon emissions produced in the UK rose by 72% during 2021, but it remains only a 12th of overall UK output.

The UK’s van industry performed considerably better than passenger car makers, with production up 24% on 2020 and up 3% compared with 2019. Hawes said the online shopping delivery boom had contributed to “extraordinarily high demand” for vans.


Jasper Jolly

The GuardianTramp

Related Content

Article image
UK car production in 2020 slumped to lowest level since 1984
Covid pandemic resulted in output drop of 29%, the ‘worst in a generation’, say industry experts

Jasper Jolly

28, Jan, 2021 @12:01 AM

Article image
British car manufacturing slumps to lowest level since 2010
Production declines more than 14% as carmakers face decline of exports and Brexit uncertainty

Jasper Jolly

30, Jan, 2020 @6:01 AM

Article image
Every major UK and European carmaker to stop or cut production
As disruption from Covid-19 spreads, only some low-volume producers will remain open

Jasper Jolly

20, Mar, 2020 @1:25 PM

Article image
UK car production hits 17-year high as industry issues Brexit warning
Exports boosted by week pound, but SMMT says government must negotiate free trade deal between UK and EU

Angela Monaghan

27, Apr, 2017 @6:42 AM

Article image
'Wake-up call for UK' after nine months of falling car production
Industry warns of ‘fever pitch’ of anxiety over fears of damage caused by Brexit

Gwyn Topham Transport correspondent

28, Mar, 2019 @12:01 AM

Article image
UK car production plunged in March to lowest level since 2009
Just 78,767 vehicles left factory gates last month, the worst result since the financial crisis

Jasper Jolly

29, Apr, 2020 @11:01 PM

Article image
UK car industry in brace position ahead of Brexit deadline
Carmakers face perfect storm of EU exit uncertainty and weaker demand in China

Jasper Jolly

09, Aug, 2019 @12:10 PM

Article image
UK's carmakers face twin concerns of global upheaval and Brexit
Manufacturers face investment decisions amid transition to electric and self-drive vehicles

Jasper Jolly

11, Feb, 2019 @7:00 AM

Article image
Fears UK car industry may never recover as production lines close
Plants responsible for two-thirds of UK’s output and employing 17,000 workers have ceased operating

Rob Davies

18, Mar, 2020 @5:01 PM

Article image
Theresa May urged to give Nissan assurances over EU export tariffs
Labour MP says tens of thousands of jobs at risk as future of Sunderland Nissan plant put in jeopardy

Josh Halliday

11, Oct, 2016 @6:37 PM