UK car production: chip shortage sliced 100k cars off Q1 2022 output

UK car production declined 32.4 per cent in the first quarter of 2022, with only 207,347 new cars built

Production line

Nearly 100,000 fewer cars were built in the first quarter of 2022 than in the same period last year, the latest official figures have revealed.

The latest data from the Society of Motor Manufacturers and Traders (SMMT) shows a decline of 99,211 cars (32.4 per cent) in the first three months of 2022 as a result of the semiconductor shortage plaguing the industry. Only 207,347 new cars were built during the first quarter, down from 306,558 in Q1 2021.

Output for March 2022 alone was down 33.4 per cent year-on-year, with 76,900 units made compared with 115,498 in the same month last year. As such, this was the weakest March since 2009 in the midst of the global financial crisis.

March’s production woes were primarily driven by a 41.4-per cent decline in demand from overseas markets. Exports to the US fell 63.8 per cent due to the closure of Honda’s Swindon plant last year, which built many cars for the American market. EU exports, meanwhile, fell 24.5 per cent.

The SMMT wants the automotive industry to receive relief on energy costs equivalent to that afforded to energy-intensive industries, as well as similar access to low-cost and low-carbon energy that European competitors have.

Mike Hawes, chief executive of the SMMT, said: “Two years after the start of the pandemic, automotive production is still suffering badly, with nearly 100,000 units lost in the first quarter.

“Recovery has not yet begun and, with a backdrop of an increasingly difficult economic environment - including escalating energy costs - urgent action is needed to protect the competitiveness of UK manufacturing.

“We want the UK to be at the forefront of the transition to electrified vehicles - not just as a market, but as a manufacturer - so action is urgently needed if we are to safeguard jobs and livelihoods.”

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