Car production ‘plummeted’ in July

The ‘pingdemic’, a global microchip shortage and summer factory shutdowns all affected production last month.

Alan Jones
Thursday 26 August 2021 08:29
New cars (Gareth Fuller/PA)
New cars (Gareth Fuller/PA)

Car production “plummeted” last month amid ongoing staff shortages because of the “pingdemic” and the global shortage of microchips, research shows.

Just under 53,500 cars were built in July, a fall of 37.6% on the same month last year, and the worst July performance since 1956, said the Society of Motor Manufacturers and Traders (SMMT).

Summer shutdowns of factories also affected production, which was down by 38% for the UK to 8,233 while manufacturing for export fell by 37.4% to 45,205.

One in five cars made in July were alternatively fuelled, their highest share on record, said the SMMT.

More than a quarter of all cars made in July were either battery electric (BEV), plug-in hybrid (PHEV) or hybrid electric (HEV), their highest share on record.

Exports accounted for more than eight out of 10 vehicles built last month.

Car production remains up 18.3% on Covid-hit 2020 at 552,361 units, but is down by 28.7% on 2019 pre-pandemic levels, said the SMMT, adding that production plummeted last month.

Chief executive Mike Hawes said: “These figures lay bare the extremely tough conditions UK car manufacturers continue to face.

“While the impact of the ‘pingdemic’ will lessen as self-isolation rules change, the worldwide shortage of semiconductors shows little sign of abating.

“The UK automotive industry is doing what it can to keep production lines going, testament to the adaptability of its workforce and manufacturing processes, but Government can help by continuing the supportive Covid measures currently in place and boosting our competitiveness with a reduction in energy levies and business rates for a sector that is strategically important in delivering net zero.”

Richard Peberdy, UK head of automotive at KPMG, said: “Car-makers will be cursing a mix of factors stifling their ability to produce more vehicles, namely materials and labour shortages and increases to shipping costs.

“Manufacturers are absorbing the costs for now, but we could soon see price rises being passed on to consumers should problems persist, which runs the risk of dampening the sales recovery.

“Many car-makers find themselves in a bind between electric vehicles (EV) and traditional combustion engines.

“Despite some encouraging EV uptake among consumers, regular petrol cars are still popular because of their lower price point, with some remaining wariness over EV technology and reliance on charging.

“We can expect more calls from the industry for further government support to help produce the vehicles that will drive us towards a net-zero carbon future.”