First rise in 11 months for UK car production

UK car production in grew in May 2022 for the first time since June 2021. The Society of Motor Manufacturers and Traders (SMMT) report that a total of 62,284 units left factory gates during the month, a rise of 13.3 per cent. SMMT notes, however, that the increase must be viewed in context against May 2021, which was still suffering significantly from pandemic-related headwinds. Output remains 46.3 per cent below the pre-pandemic month in 2019, with ongoing supply chain issues, increasing economic uncertainty, rising business costs and disruption caused by the war in Ukraine.

Production for both overseas and domestic markets increased in May, by 8.9 per cent and 39.5 per cent respectively. Exports accounted for 82.1 per cent of all new cars built, with almost six in ten of these destined for the EU. Shipments to the US decreased by 35.4 per cent, with the closure of a major UK plant in 2021 continuing to affect export levels across the Atlantic.

Battery electric vehicle (BEV) production increased 108.3 per cent, with 22.6 per cent of all cars built last month alternatively fuelled, up from 19.3 per cent last year.

In the year to date, overall output has decreased by 23.2 per cent, with supply chain constraints, most notable the shortage of semiconductors, constricting volumes to just 330,185 units – a shortfall of some 99,641. This has largely been driven by a 26.9 per cent decline in exports and a further 4.5 per cent fall in production for the domestic market.

Call for government action

This news comes in the same week as new analysis from SMMT revealed manufacturers are facing a £90 million increase on their energy bills, which are already 59 per cent higher than the EU average. In its new report, From Full Throttle to Full Charge, SMMT is calling on the government for urgent action to enhance UK Automotive’s competitiveness and safeguard manufacturing as the sector transitions towards zero-emission motoring.

“May’s return to growth for UK car output is hugely welcome after ten months of decline, indicating the sector’s fundamental resilience,” says Mike Hawes, SMMT chief executive. “Any recovery, however, will be gradual as supply chain deliveries remain erratic, business costs volatile and geopolitical instability still very real. With the industry racing to decarbonise, we need to safeguard manufacturing competitiveness, drive investment and develop the skill base. Government and industry have a role to play in this transformation and collaboration will be essential if the UK is to remain at the forefront of automotive innovation.”