Car production slumps to lowest since 1956, figures show

Carmakers suffered an ‘incredibly tough’ year, although there are grounds for optimism, says trade body.

Alan Jones
Thursday 27 January 2022 00:01
High energy costs are a growing problem for the car industry (Gareth Fuller/PA)
High energy costs are a growing problem for the car industry (Gareth Fuller/PA)

The number of cars built in the UK last year fell to the lowest total since 1956 as the industry suffered a “dismal” 12 months, new figures have revealed.

Production was down by 6.7% over the year to 859,575, and down by a third compared with the pre-pandemic 2019 figure.

The Society of Motor Manufacturers and Traders (SMMT) said issues such as the shortage of semi conductors, the closure of Honda’s Swindon factory, Covid-related issues like staff shortages and border controls following Brexit had all affected carmakers.

Factories had to reduce or pause production as they waited for parts hit by the global pandemic.

2021 was another incredibly difficult year for UK car manufacturing, one of the worst since the Second World War which lays bare the exposure of the sector to structural and, especially, Covid-related impacts

Mike Hawes, SMMT

High energy costs are a growing problem for the industry, SMMT chief executive Mike Hawes warned.

He said there were grounds for optimism in 2022, with potential £4.9 billion of investment announced, the highest since 2013, and annual production forecast to begin recovering to over one million.

The new data showed factories built a record number of battery electric (BEV), plug-in hybrid (PHEV) and hybrid electric vehicles (HEV) last year, with almost a quarter of a million of these zero and ultra-low emission vehicles leaving production lines, representing more than one in four of all cars made.

Four out of five new cars were shipped overseas, with the European Union being the biggest market at 55%, followed by the United States.

The SMMT said a significant proportion of announced investments was in support of electrified vehicles, with the expansion of existing facilities in the North-East and the proposed development of a new battery gigafactory in the West Midlands.

Mr Hawes said there was consumer demand for new cars, adding: “2021 was another incredibly difficult year for UK car manufacturing, one of the worst since the Second World War which lays bare the exposure of the sector to structural and, especially, Covid-related impacts.

“Despite this miserable year, there is optimism. With Brexit uncertainty largely overcome, investments have been unleashed, most of which will help transform the sector to its zero-emission future.

“This is a vote of global confidence in the UK but must be matched by a commitment to our long-term competitiveness, support for the supply chain in overcoming parts shortages, help with skills and training and, most urgently, measures to mitigate the escalating energy costs which are threatening viability.”

It is heartening that investment is recovering and electric vehicle production continues to increase at pace

Unite spokesperson

The SMMT added that the latest independent production outlook for 2022 forecasts UK car production to increase to more than one million units, representing a near 20% increase on the 2021 total, and could reach 1.1 million in 2025, with further growth beyond.

A Unite spokesperson said: “It is heartening that investment is recovering and electric vehicle production continues to increase at pace.

“For this progress to be built upon and for the UK to retain its world-leading auto sector, however, there needs to be ‘hands on’ Government involvement and investment to ensure the opportunities the transition to electrification presents are fully realised.

“That’s why it is essential that the Government brings forward a tailored industrial blueprint for automotive as soon as possible.”

Register for free to continue reading

Registration is a free and easy way to support our truly independent journalism

By registering, you will also enjoy limited access to Premium articles, exclusive newsletters, commenting, and virtual events with our leading journalists

Already have an account? sign in

By clicking ‘Register’ you confirm that your data has been entered correctly and you have read and agree to our Terms of use, Cookie policy and Privacy notice.

This site is protected by reCAPTCHA and the Google Privacy policy and Terms of service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged inPlease refresh your browser to be logged in