UK car manufacturing down 27 per cent as chip shortage continues to hit hard

UK car production continues to be hit hard by the semiconductor chip shortage, with total output down 27 per cent in August compared with the same month last year.

With just 37,246 cars built, it marked the second consecutive month of decline.

Industry body the Society of Motor Manufacturers and Traders released the figures today, and said the global chip shortage was leading to production stoppages which have coincided with some manufacturers’ factory shutdowns.

UK car manufacturing summary August 2021
(SMMT)

In a stark warning to the industry, it also noted that the chip supply issues could carry on into 2022 and beyond.

Despite the production downturn, production of electrified vehicles – including all-electric, plug-in hybrid and hybrid cars – hit a new high of 10,274 units, which was 27.6 per cent of all production.

Mike Hawes, SMMT chief executive, said: “Another significant decline for UK car production is extremely worrying both for the sector and its many thousands of workers nationwide.

“While not the only factor at play, the impact of the semiconductor shortage on manufacturing cannot be overstated.

“Carmakers and their suppliers are battling to keep production lines rolling with constraints expected to continue well into 2022 and possibly beyond.

“Job support schemes such as furlough have proven such a lifeline to automotive businesses yet its cessation today comes at the worst time, with the industry still facing Covid-related stoppages which are damaging the sector and threatening the supply chain in particular.

“Other countries have extended their support; we need the UK to do likewise.”

The overall production decline was driven by reduced exports (-32.5 per cent), particularly to faraway markets such as Australia, the US and China, which were down 74.9, 65.7 and 58.7 per cent respectively.