UK Car Industry Reports ‘Worst July Performance Since 1956’

The UK car production industry has reported the worst July performance since 1956, according to a report by the Society of Motor Manufacturers and Traders.

There was a sharp decrease in July of 37.6% when compared with July 2020.

The new car industry is facing a global microchip shortage, and many staff are affected by the so-called pingdemic. These contributing factors coupled with shutdowns meant that just 53,438 cars were built in July 2021.

Overall, car production for the year to date is almost 20% higher than during 2020 – but that is still 28.7% down on 2019 pre-pandemic levels.

The Society of Motor Manufacturers and Traders spokesperson, Mike Hawes, said the July 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,” he added.

The shortage of semiconductors – or microchips – has put additional pressure on many carmakers, who are competing directly with tech companies and the consumer electronics sector for supply.

Last year, some car producers cancelled their semiconductor orders due to fears of a long downturn in sales as the pandemic took hold. However, as demand began to recover, many companies found themselves at the back of the queue for microchips.

The Society of Motor Manufacturers and Traders also revealed that demand for alternatively fuelled models is picking up. More than 25% of all cars made in July were either battery-electric or hybrid electric, making this the highest share on record.

“The UK automotive industry is doing what it can to keep production lines going, testament to the adaptability of its workforce and manufacturing processes,” Mr Hawes added.

“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.”

The UK car industry is a vital part of the country’s economy accounting for a £78.9bn turnover. Car producers employ over 180,000 people in manufacturing and 864,000 across the wider supply chain, with 30 manufacturers building approximately 70 car models in the UK.