UK car output in October lowest ever since 1956

UK car production slumped to its lowest ever October level since 1956 amid a global shortage of semiconductors.

Car production was down 41.4% last month, with factories turning out 64,729 units, latest figures by the Society of Motor Manufacturers and Traders (SMMT) showed. It was the fourth straight month of decline.

The weak output was made worse by the closure of a UK car plant at the end of July, a deficit that will impact figures for a year, the report said. It was likely referring to Japanese car maker Honda's (HMC) announcement earlier in 2021 that it was shutting down its factory in Swindon.

“These figures are extremely worrying and show how badly the global semiconductor shortage is hitting UK car manufacturers and their suppliers,” said SMMT CEO Mike Hawes.

“Britain’s automotive sector is resilient, but with COVID resurgent across some of our largest markets and global supply chains stretched and even breaking, the immediate challenges in keeping the industry operational are immense,” he said.

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He added that the UK government can help the industry with measures to boost competitiveness in line with global rivals. This includes tackling high energy costs, supporting employment and training, and helping businesses whose cash flow is under pressure from these historically poor production numbers.

Meanwhile, production for domestic and overseas markets fell 37.9% and 42.1% respectively.

Although more than eight-in-10 of all cars made were shipped abroad, most of these (60%) went to the EU, “emphasising the importance of the deal struck last year which allows automotive trade with Europe to be tariff-free”, SMMT said.

Overall, shipments to the EU fell by a “relatively modest” 29.2%, while those to Japan were down 57.1% and to the US fell to 67.0%.

One encouraging point was battery electric vehicle (EV) manufacturing, which rose 17.5% to 8,454 units. This means that UK car makers have produced more than 50,000 zero emission vehicles so far this year, exceeding the total built in the whole of 2019, before the pandemic hit.

EVs have overtaken their petrol counterparts as car buyers’ next intended purchase for the first time, according to a report by Autovia, a publisher of automotive information.

As per its tracker of car-buyers' intentions, EVs moved into the lead in September and have since risen to around one-in-three intended future purchases.

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