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Global chip shortage slows UK car production

·2-min read
Cars at the Vauxhall plant in Ellesmere Port, Cheshire. Workers at Vauxhall's UK car factory are waiting for news about the future of the plant, with an announcement expected later on Thursday. Picture date: Wednesday February 24, 2021.
Cars at the Vauxhall plant in Ellesmere Port, Cheshire. (Photo:PA)

UK car production fell 27% in August, the second consecutive month of decline, with 37,246 cars manufactured, according to the latest figures released today by the Society of Motor Manufacturers and Traders (SMMT). 

Output was affected by the continuing global shortage of semiconductors leading to production stoppages, as well as the timing and length of some manufacturers’ summer factory shutdowns.

"Carmakers and their suppliers are battling to keep production lines rolling with constraints expected to continue well into 2022 and possibly beyond," said SMMT CEO, Mike Hawes.

While manufacturing for the UK market increased 3.3% in the month, the rise was equivalent to just 255 additional units. Meanwhile, exports fell dramatically, down 32.5%. 

29,200 cars were shipped overseas, with the decline driven by falling exports to faraway markets including Australia, the US and China down 74.9%, 65.7% and 58.7% respectively. 

Exports to the EU held up comparatively better, down 4.9%, accounting for almost seven in every 10 cars exported in August.

Production in the year-to-date remains up, by 13.8%, to 589,607 cars, driven by exports with 83.2% of everything made heading for markets abroad. 

The performance, however, must be set in context against a COVID-hit 2020 as it remains significantly lower, by 32.0%, than in 2019. The total is 42.8% down, equivalent to 440,920 fewer units, when compared against the five-year average for the first eight months of the year.

Read more: Private sector growth slows as post-COVID boost wears off

Despite the challenges, production of the latest battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) cars surged to a new high, representing more than a quarter (27.6%) of all cars made, equivalent to 10,274 units.

It means UK car factories have turned out 137,031 alternatively fuelled cars since January, 51,679 more than the same period in 2020.

Watch: What is inflation and why is it important?

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