Lowest auto production levels for July since 1956, UK industry reports | Automobile industry
British auto factories produced the fewest cars in July since 1956 as they battled worker absences and the global shortage of computer chips.
British automakers manufactured 53,400 vehicles in July, down 37.6% from the same month in 2020, according to data from the Society of Motor Manufacturers and Traders (SMMT), the lobby group for the industry.
Demand for new cars has remained relatively strong during the coronavirus pandemic, but automakers around the world have struggled to keep producing due to issues in their supply chains, especially due to multi-month delays from the chips. computers, or semiconductors, which are used to control everything from windshield wipers to electric car batteries in the car.
Some analysts expect the chip shortage to last until next year, slowing the recovery of the auto industry.
UK production during 2021 is up 18% from the first seven months of 2020, when auto factories were closed for extended periods during the first nationwide shutdowns. Yet at 552,400 units, it is 29% lower than the 774,800 it reached over the same period in 2019 before the pandemic.
No major automaker has been spared and buyers are forced to wait months for new cars. German automaker Volkswagen warned last week that it may have to cut production further, after Japanese rival Toyota announced it would cut production by 40% in September.
Jaguar Land Rover and Nissan, the UK’s two largest manufacturers, have both been forced to cut production due to shortages.
In June and July, manufacturers also faced increased levels of employee absences, as more workers were ‘flagged’ by their NHS apps when they came into contact with people who were then tested positive for the coronavirus. Rules in England, which are home to nearly all of the UK’s auto factories, were relaxed on August 16 so that vaccinated people no longer have to self-isolate after contact.
Mike Hawes, managing director of SMMT, said UK car manufacturers still faced “extremely difficult conditions”.
“While the impact of ‘pingemia’ will diminish as the rules for self-isolation change, the global semiconductor shortage shows little sign of abating,” he said. He added that the government could help the industry by reducing energy costs and tariffs for businesses.
The weak UK production has had the effect of increasing the sales share of electric and hybrid battery-powered cars, which combine a battery with an internal combustion engine, to the highest level on record. The SMMT said 26% of cars made in the UK are electric or hybrid.
Some automakers have pushed the production of battery-electric vehicles during the semiconductor supply crisis to meet the lower average emissions requirements that were introduced in early 2020, according to an industry consultant. . This could mean that any increase in the share of EVs could be short lived once the pressures ease.
However, Matthias Schmidt, an independent automotive analyst, said “profitability trumps volume,” and noted that the bosses of Volkswagen, Renault and Daimler, owner of Mercedes-Benz, had said they would focus their efforts. resources on internal combustion engine cars with the highest profits. margins while supplies are limited.