UK car production increases but recovery hit by supply shortages
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Car production has continued to increase but the industry’s recovery from the pandemic is being hit by a global shortage of supplies such as semiconductors, new research shows.
Almost 55,000 cars left UK factories in May, compared to just 5,314 in the same month a year ago, but still down by over 50% on May 2019.
The Society of Motor Manufacturers and Traders (SMMT) said so far this year UK factories have built 429,826 cars, up 105,063 on 2020, but overall output remains down by 22.9% on the same five-month period in 2019.
Alternatively fuelled vehicles now account for more than one in five cars built this year, with one in 16 being battery electric.
The SMMT said the figures showed the scale of the challenge facing the industry as it seeks to recover from the pandemic while grappling with global supply shortages, notably of semiconductors.
Manufacturing of electrified vehicles is increasing while car production generally continues to be export-led, with 83.6% of all cars built in 2021 shipped overseas.
The European Union remains the most important destination for British cars, taking 56% of all exports, followed by the US (18.3%) and China (7.3%).
Mike Hawes, SMMT chief executive, said: “May’s figures continue to look inflated when compared to last year’s near total standstill of production lines.
“The recovery of car production is, however, still massively challenged here and abroad by global supply shortages, particularly semiconductors.
“If the UK is to remain competitive, therefore, it must ensure it has a globally attractive policy framework for both vehicle production and the supply chain.
“Accelerating zero emission car production is part of this package, so while one in five models made here this year is alternatively fuelled, we need to drive investment in research and development, charging infrastructure and the market to ensure we can deliver the net zero future society demands.”
A Business Department spokesman said: “We are committed to ensuring the UK continues to be one of the best locations in the world for automotive manufacturing and we’re doing all we can to protect and create jobs.
“We are securing a competitive future for the sector through a major investment programme of up to £1 billion to support the electrification of the auto supply chain, including the development of gigafactories in the UK.”