The UK’s third consecutive month of falling vehicle production saw the car industry complain about the lack of Budget support.
Last month saw 67,169 cars leave production lines. This is a decrease of 41.5 percent over the same time last years and the worst September figure since 1982, according to the Society of Motor Manufacturers and Traders.
According to the trade organization, the global shortage in semiconductors continues to impact output.
In the slow lane: UK’s new car production continues to be affected by the global shortage in semiconductors, according to a motor industry boss. He blasts the Government for not offering support to the struggling sector after Covid.
According to a poll conducted by the SMMT (and the wider UK manufacturing sector), more than 83% of domestic automotive companies have been adversely affected by the shortage of computer chips. This is primarily due to lower orders, cost increases and disruptions.
The supply chain has spent more than £2.4 billion to date managing additional costs which are unlikely to be recovered, with most (56 per cent) not expecting supply constraints to improve until the third quarter of 2022 and more than a third (38 per cent) having to reduce operating hours to cope with the challenge.
One in ten firms has made redundancies or restructured their business as a result of the shortage of semiconductors. Six in ten (65%) SMEs sought extensions to the Coronavirus Job Retention Schemes. This highlights the fact that the impact of the pandemic on the sector, although it may be receding is still very significant.
Industry bosses said the worst September for UK car production in 39 years was also due to the recent closure of Honda Swindon, which had been one of the UK’s larger vehicle plants in the county that built the popular Civic family hatchback for the European market.
Industry bosses claimed that the recent closure of Honda Swindon’s plant earlier this year, which resulted in the worst September for UK car manufacturing in 39 years, was also to blame.
It said that while the Budget confirmed £817million for the transition in automotive manufacturing and business rate relief on renewable energy, the industry continues to battle against the ongoing effects of the pandemic.
Mike Hawes, chief executive of SMMT, stated that the Budget’missed an opportunity to offer meaningful, short-term support.
He stated that the significant decline in UK car production in September continued the worrying trend he has seen over the past three month’s in a statement.
“The industry continues to battle the effects from the pandemic, with the shortage in semiconductors stalling production.
“While there was good news in the Budget that supported the transition to zero emission vehicle production, battery manufacture, and supply chains, it missed an opportunity to provide meaningful short-term support due to Covid-related supply limitations and rising energy costs.
‘This is disappointing given the sector’s importance and its ability to create well-paid jobs across the regions and the revenues it generates, notably from exports.’
Last month saw 67,169 cars leave production lines. This is a decrease of 41.5 percent from the same time last years and the worst September figure since 1982.
The UK’s car production has been marginally higher year-to-date, by 3.8%, with 656,776 cars leaving factory lines. This was largely driven by exports, with 82.7 percent of outputs going to markets overseas.
This does not show the whole picture. The year-to-date total is down by a third when compared to 2019.
It is also 44.1 percent lower than the 5-year average pre-pandemic. This is equivalent to 517.438 fewer units.
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