The variety of automobiles constructed within the UK within the first half of the 12 months has fallen by a fifth as producers continued to wrestle to get their arms on components required for up to date fashions.
The 403,131 new automobiles produced in factories between the beginning of January and finish of June isn’t solely 95,792 fewer than the identical interval of 2021 but in addition decrease than the half-year output for a lockdown-ravaged 2020 and worse than the opening six months of 2009 throughout the international monetary crash, official information verify.
While half provides are exhibiting indicators of stabilising, trade consultants say the sector’s restoration will probably be derailed by rising vitality prices and customers being gripped by the cost-of-living crunch.
Car outputs slide: Just 403,131 new automobiles got here off UK manufacturing traces within the first half of the 12 months. That’s fewer than in 2009 throughout the international monetary crash
Figures printed by the Society of Motor Manufacturers and Traders this morning present that automobile manufacturing within the first six months of the 12 months is nineteen.2 per cent down on 2021.
The most important trigger stays shortages of key elements, most notably semiconductors, with provides severely restricted because the pandemic hit over two years in the past.
Access to components was additional exacerbated by the struggle in Ukraine, blocking one of many main provide traces for wiring harnesses specifically.
The closure of Honda’s Swindon plant final 12 months additionally meant there could be an inevitable decline in outputs following the lack of one of many nation’s largest automobile manufacturing crops.
Despite this difficult backdrop, June recorded a 5.6 per cent uptick in output, with 72,946 items constructed because the components provide chain has began to extend.
Although this was the most effective June efficiency because the begin of the pandemic it was nonetheless a 3rd down on pre-pandemic 2019 ranges.
A progress in electrical automobile manufacturing additionally had a component to play in retaining the sector ticking over, particularly final month as outputs rose by a document 44.2 per cent.
It means 32,282 battery-electric fashions got here off UK manufacturing traces within the first half of the 12 months, which is a rise of 6.5 per cent year-on-year.
While automobile manufacturing outputs in June have been marginally increased than the identical month in 2021, manufacturing is considerably behind the document ranges seen between 2016 and 2018
But worse is ready to come back for the sector, with additional vitality value hikes looming, making automobile manufacturing more and more costly.
With this in thoughts, the SMMT has additional downgraded its annual manufacturing output – not for the primary time this 12 months, having already lowered its prediction in March.
It now estimates that 866,000 automobiles will probably be produced in whole this 12 months, which represents a progress of 1 per cent on 2021 volumes.
Output is focused to enhance additional in 2023 to 956,575 items, earlier than surpassing a million items by 2025 as provide chain points recede additional.
Commenting on the half-year report, Mike Hawes, SMMT chief govt, mentioned automobile makers have ‘suffered from a “long Covid” for much of 2022’.
‘As these issues recede over the next year or two, investment in new technologies and processes will be essential but this will depend on our underlying competitiveness,’ he mentioned earlier than highlighting the brand new set of complications going through the sector within the coming months.
He provides: ‘Sky-high energy costs, non-competitive business rates and skills shortages must all be addressed if we are to build on our inherent strengths and seize the opportunities presented by the dash for decarbonised mobility.’
Experts says a scarcity of elements, particularly semiconductor pc chips, is exhibiting indicators of easing, however producers face a set of recent complications with vitality payments hovering and customers gripped by the cost-of-living crunch
Chris Knight, UK automotive accomplice at KPMG, shared Mr Hawes’ considerations for the months forward – and warned it could doubtless end in increased automobile costs for patrons.
He advised us: ‘The cost of car manufacturing has increased due to price rises of raw materials, components, transport and energy.
‘Manufacturers have limited ability to absorb additional cost and will pass this onto consumers in the form of higher prices.
‘Consumers are willing to pay a premium for now, as demand for new cars still far outpaces supply, however this willingness may decline if consumer confidence erodes.’
Jim Holder, What Car?’s editorial course, says the nation’s automobile manufacturing sector is now ‘walking a tightrope’ attempting to get well from its most troublesome interval whereas additionally trying to navigate a cost-of-living disaster and a once-in-a-century transition in the direction of electrical automobile and carbon-neutral manufacturing.
‘Already, the UK automotive industry has made giant environmental strides, but it cannot manage the transition without support in such a restricted market,’ he warned.
Last week, What Car? mentioned over a 3rd of motorists anticipating shopping for a automobile this 12 months have determined to delay their buying plans, with many placing their intention on maintain till 2023.
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