UK car production hits new lows in 2022

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UK car production hits new lows in 2022

Car production in Britain has plunged a further 10 per cent to new lows not seen since the 1950s when Sir Anthony Eden was prime minister.

In 2022, the UK produced only 775,000 vehicles, a decline from the 859,000 that rolled off assembly lines in 2021, a worst year since 1956, a year before the British automotive industry was transformed by the start of mass production of the Mini.

Car factory output is down 40 per cent on pre-pandemic levels in 2019 and down 55 per cent from the most recent high of 1.72 million in 2016 according to the latest figures.

It is not good news, said Mike Hawes, Chief Executive of the Society of Motor Manufacturers and Traders SMMT. We thought 2021 was bad. Britain's largest carmakers have the fortunes of the crisis. Jaguar Land Rover, which has factories in the West Midlands and Merseyside, built only 202,000 vehicles in 2022, its lowest level in more than a decade and 63 per cent less than the 544,000 it manufactured in its UK plants in 2016.

The company has said this is a result of the decision to downsize to become a modern, luxury, lower-volume manufacturer as it transitions its fleet to zero emission engines. It has been particularly badly hit by the long tail of the Pandemic supply chain dislocation and shortage of computer chips.

In the year 2016, Nissan's output at its plant in the northeast bounced 16 per cent to 238,000 on the back of demand for the latest hybrid generation of its best-selling Qashqai model, but that is still less than half of the 507,000 it produced in 2016 at its plant in the northeast.

In recent years, production of the BMW subsidiary Mini based in Cowley in Oxford has remained relatively stable, but the production of the Toyota Corolla was down 19 per cent at the Japanese carmaker's Derbyshire plant in Burnaston, which produces 44 per cent fewer cars than seven years ago. Since the middle of the last decade, the shortfall of more than 250,000 UK-built cars has been left behind by the production of the Honda Civic in Swindon in Wiltshire and the Vauxhall Astra.

Britain's luxury carmakers have never been in worse health, both in volume and profitability. Bentley, a Volkswagen subsidiary, produced more than 15,000 vehicles for the first time from its Crewe plant in Cheshire, while Rolls-Royce, a BMW subsidiary, went through 6,000 units for the first time from its factory in Goodwood in West Sussex.

Hawes said that British factories had been worse hit than their European counterparts from supply chain issues involving semiconductors, components from Covid-hit Chinese factories and wiring harnesses from war-torn Ukraine.

He said that industry volumes had been affected by soaring energy costs - 80 per cent higher than French and German factories - and a tight labour market in which costs are going up at a time when there is a shortage of software engineers.

Hawes warned that the churn of prime ministers, chancellors and ministers had given Britain an air of economic instability that was also affecting investment decisions.

He said the industry was concerned about regulatory uncertainty, with tighter rules of origin requirements, or 10 per cent import and export taxes being imposed, while there was an undetermined government ZEV mandate from 2024, in which manufacturers must be at least 22 per cent zero emission vehicles in the UK, or else penalties will be imposed.

He said that America s Inflation Reduction Act, which offers sweeteners to global carmakers to take electric vehicle production to the US, could affect any future investment in Britain.

As part of a longer-term recovery, the SMMT forecasts a small bounce in total production of cars this year to 842,000.