UK car production falls as global chip shortage continues to bite

According to the report from the Society of Motor Manufacturers and Traders Limited (SMMT), UK car production fell -27.0% in August, the second consecutive month of decline, with 37,246 cars manufactured. Output was affected by the continuing global shortage of semiconductors leading to production stoppages, as well as the timing and length of some manufacturers’ summer factory shutdowns.

Despite the challenges, production of the latest battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) cars surged to a new high, representing more than a quarter (27.6%) of all cars made, equivalent to 10,274 units. It means UK car factories have turned out 137,031 alternatively fuelled cars since January, 51,679 more than the same period in 2020.

While manufacturing for the UK market increased 3.3% in the month, the rise was equivalent to just 255 additional units and exports fell dramatically, down -32.5%. 29,200 cars were shipped overseas, with the decline driven by falling exports to faraway markets including Australia, the US and China down -74.9%, -65.7% and -58.7% respectively. Exports to the EU held up better, down -4.9%, accounting for almost seven in every 10 cars exported in August.

Production in the year-to-date remains up, by 13.8%, to 589,607 cars, driven by exports with 83.2% of everything made heading for markets abroad. The performance, however, must be set in context against a Covid-hit 2020 as it remains significantly lower, by -32.0%, than in 2019. The total is -42.8% down, equivalent to 440,920 fewer units, when compared against the five-year average for the first eight months of the year.