UK automobile manufacturing declined -19.2% within the first six months of the yr, in accordance to figures printed immediately by the Society of Motor Producers and Merchants (SMMT), with 95,792 fewer autos constructed in contrast with the identical interval in 2021.
403,131 items have been constructed, representing the weakest first half for the reason that pandemic-ravaged 2020 and worse than 2009 when the worldwide monetary disaster decimated demand. The principle trigger stays shortages of key elements, most notably semiconductors, exacerbated by extra provide points brought on by the struggle in Ukraine, in addition to important structural and mannequin adjustments inside the sector.
Regardless of this difficult backdrop, June was the second consecutive month of accelerating automobile manufacturing within the UK, up 5.6% with 72,946 items constructed. Though this was one of the best June efficiency for the reason that begin of the pandemic, partially on account of provide chain shortages starting to ease, output stays -33.2% under 2019 ranges.
The year-to-date decline was pushed largely by a fall in export volumes, with -23.9% fewer automobiles produced for abroad markets through the first half of 2022. This represents a lack of 99,388 items in contrast with the identical interval in 2021, regardless of exports nonetheless accounting for 78.6% of all manufacturing output. Whereas the EU was the most important recipient of UK constructed automobiles, accounting for greater than 60% of exports, shipments to the bloc decreased by -10.6%. Deliveries to the US additionally declined by -56.1% with the closure of a significant UK plant in 2021 having a major affect. Output for the UK market, nonetheless, rose by 4.3%.
Manufacturing of battery electrical autos (BEVs) has once more confirmed to be a vivid spot for the sector, with 32,282 produced within the first half of the yr, a rise of 6.5%. This was bolstered by a 44.2% rise throughout June leading to a report output of zero emission autos for the month. Output of hybrid, petrol and diesel automobiles, in the meantime, declined, by -19.9%, -8.0% and -60.2% respectively within the first half of the yr.
The continued disruption to world provide chains has led to a downgrading of the business’s manufacturing outlook, with 866,000 automobiles now anticipated to be constructed this yr. Whereas this represents 1% development on 2021 volumes, it’s 113,285 items under the March outlook, a mirrored image of the affect of the Ukraine disaster, lockdowns in China and the severity of components shortages. 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.
Regardless of automobile manufacturing lowering general this yr, important funding into the UK business is being made, with greater than £3.4 billion introduced to date in 2022, primarily for EV manufacturing and provide chains.4 This funding will present a major enhance to the UK and native economies, creating and safeguarding jobs in a sector that’s pivotal to the UK’s internet zero purpose.
Mike Hawes, SMMT Chief Government, mentioned, “Automobile producers have been affected by a ‘lengthy Covid’ for a lot of 2022, as world part shortages undermine manufacturing and put provide chains underneath excessive stress. Key mannequin changeovers and the closure of a significant plant final yr have additionally impacted output, however there are grounds for optimism with rising output during the last two months. As these points recede over the subsequent yr or two, funding in new applied sciences and processes will probably be important however this can depend upon our underlying competitiveness. Sky-high power prices, non-competitive enterprise charges and abilities shortages should all be addressed if we’re to construct on our inherent strengths and seize the alternatives introduced by the sprint for decarbonised mobility.”