UK car production fell by 20.1% in January, the worst start to a year since 2009.

Just 68,790 units have been built, according to the Society of Motor Manufacturers and Traders (SMMT).

Output was down 17,262 units compared to January 2021, which itself was one of the worst Januarys on record. Last year’s poor results were blamed on the post-Brexit trading arrangements, extended shutdowns and the pandemic.

Thew brakes are on

The SMMT says that several factors are conspiring to drive year-on-year production down.

Key is the continuing global shortage of semiconductors. This is exacerbated by the loss of Honda’s Swindon plant in July 2021. Lack of essential parts, post-Brexit cost increases and economic downturn are all sending ominous warning for the future.

SMMT chief executive, Mike Hawes, says “it’s another torrid start to the year”.  But he remains confident the industry will ride out the issues, describing the industry as “fundamentally strong”. Hawes added that “recent investment announcements are testament to the potential for growth, not least in terms of rising EV production”.

However, he insists that British car making must be more competitive and embrace the electric transformation.

“Long-term recovery can only be delivered, however, if global competitiveness is assured and for that we must address both inflationary and fixed costs, most obviously escalating energy prices, but also fiscal and trading costs.

“Every measure must be taken if we are to secure a bright, electrified future for our world-class automotive manufacturing base and the high skilled, high value jobs it creates across Britain.”

Getting charged up

SMMT figures show that battery electric vehicles (BEVs) now account for one in 11 cars made in the UK. Their production rose 37.6% to 6,326 units in 12 months.

Including plug-in hybrids and hybrids, electrified vehicles accounts for more than a quarter of output now.

In the global context, British production for both overseas and domestic markets was down year-on-year, by 17.5% and 30.8% respectively. Exports accounted for more than eight in 10 cars made.

The EU remained the largest destination for UK-made cars. They take 59.1% of exports, followed by China (10.4%) and the US (10.0%).

Plugged in to the future

Independent expectations for UK car production have been revised downwards from the autumn outlook by 2.4% for 2022. This would still represent a 14.4% increase on 2021’s outturn.

The future of electric vehicle production is positive. Several manufacturers have confirmed expansion of EV production in the UK.