Car production rates will create 'more positive future' for the UK thanks to EV boost

Global semiconductor chip shortages hampered the worldwide production of cars, with the coronavirus pandemic also leaving a lasting impact on the industry.

But now, experts are confident that the UK will slowly return to pre-pandemic levels and back to an output of over one million, which has not been seen consistently since before July 2020.

Mike Hawes, SMMT Chief Executive, said: “Six months of growth shows that British car production is recovering and, with electrified models increasingly driving volumes, the future is more positive.

“Recent investment announcements have undoubtedly bolstered the sector but global competition remains tough.

“If we are to attract further investment and produce the next generation of zero emission models and technologies, we need a coherent strategy that builds on our strengths and supports all aspects of advanced automotive manufacturing.”

Output increased for both internal sales and worldwide exports, with global exports representing the bulk of all production for the month.

More than eight in 10 vehicles produced in July were shipped overseas, with the top destinations being the European Union, United States, China, Japan and Australia.

Manufacturing of electric and hybrid vehicles also increased dramatically, with combined volumes rising 73.9 per cent to 30,180 units – representing almost two in every five vehicles made last month.

Since January, vehicle brands have produced more than 200,000 hybrid electric, plug-in hybrid, and battery electric vehicles.

This is almost double the amount produced in the same period last year, with rates increasing 14.2 per cent year-on-year.

Richard Bartlett-Rawlings, partner and automotive manufacturing specialist at RSM UK, commented on the figures, saying it proved that the industry was getting past supply chain issues faced in recent years, but tempered long-term expectations.

He added: “Despite positivity, significant headwinds remain for car production in the UK and manufacturers will need to balance output levels against the cost-of-living crisis, inflationary pressures, post-Brexit changes to cross-border trade rules and a pivotal shift towards low carbon motoring.

“In addition, looming rules of origin legislation will make it more difficult to export UK-made vehicles to the EU.

“If calls from UK and European manufacturers to delay the January 2024 implementation date are not acted on, then the red tape burden could derail progress and impact growth in the sector.”

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Estimates suggest that total UK car production will reach around 860,000 units this year, an uplift of 10.9 per cent compared to last year.