UK automobile manufacturing pushed down by international chip scarcity

UK automobile crops won’t return to producing 1mn autos a 12 months till not less than 2025 — two years later than anticipated — owing to a world scarcity in key elements, a commerce physique warned on Wednesday.

In March, AutoAnalysis, which calculates manufacturing forecasts for business commerce physique Society of Motor Producers and Merchants, stated UK annual automobile manufacturing would rise above 1mn in 2023.

The business made 1.3mn vehicles in 2019, which fell to 920,000 in 2020 and 850,000 final 12 months.

However the battle in Ukraine and continued shortage of semiconductor chips that started within the pandemic led the forecaster to push again the date to 2025, and minimize this 12 months’s anticipated output by 15 per cent.

AutoAnalysis predicted factories will solely make 866,000 vehicles or vans this 12 months — greater than final 12 months however some 113,000 decrease than its earlier forecast from March.

“The affect of the final three to 4 months was extra extreme than had been anticipated,” stated SMMT chief govt Mike Hawes.

“Automobile producers have been affected by a ‘lengthy Covid’ for a lot of 2022, as international part shortages undermine manufacturing and put provide chains underneath excessive stress,” he added.

Official figures from the SMMT confirmed automobile manufacturing within the first six months of the 12 months fell by a fifth to 403,000 autos, the worst first-half efficiency because the pandemic-hit 12 months of 2020.

The closure of Honda’s plant in Swindon and the tip of manufacturing of the Vauxhall Astras in Ellesmere Port, which can start producing a brand new electrical van later this 12 months, additionally contributed to the drop.

Manufacturing ranges did rise throughout Could and June, as demand for vans and new fashions lifted output.

Manufacturing of vans within the UK, which come primarily from the Stellantis plant in Luton, elevated 47 per cent within the first half of the 12 months.

Carmakers have been hampered by a global shortage in semiconductors since the beginning of the pandemic, which has curtailed manufacturing and brought on lengthy ready lists for a lot of new fashions.

Jaguar Land Rover stated on Wednesday it had an order e-book of 200,000 autos, the very best in its historical past. But the group blamed elements shortages for slowing manufacturing of the Vary Rover and Vary Rover Sport, its newest fashions, which pushed the group to a £524mn loss for the three months between April and June.

The SMMT desires the UK to make 2mn electrical autos a 12 months by 2040, an ambition that will require present factories to develop and extra companies to open websites in addition to new battery factories.

“We all know a lot of producers are European manufacturing, whether or not American, Chinese language or start-ups,” stated Hawes. “We are able to make a compelling case to get them right here within the UK.”

He stated the UK wanted to draw funding with tax breaks and mitigate excessive vitality prices that put British crops at an obstacle to European rivals.

In response to information that tracks new funding bulletins into automobile factories, throughout the previous six months the entire rose to £3.4bn, up on £606mn final 12 months — its highest first-half stage in a decade. The sum, which fluctuates as a result of carmakers usually unveil spending plans that cowl a number of years, is simply above the long-term common of £3bn.