UK new car output drops for fifth month running

UK new car output drops for fifth month running

Latest figures from the SMMT reveal that November was the fifth straight month of decline for car production in the UK, with just 75,756 units leaving factory gates.

That figure represents a 28.7% year-on-year drop, and made last month the worst November since 1984. However, the SMMT does note that the closure of Honda’s Swindon plant in July 2021 will continue to impact year-on-year comparisons until that time next year.

Production for the domestic market was down 18.8%, but exports were hardest hit, falling 30.4% year-on-year. In total, some 30,487 fewer cars were built in November, compared with the same period last year. 

So far this year, UK factories have turned out 797,261 new cars, down 432,794 on 2019’s pre-December figures and 667,441 fewer than the pre-pandemic five-year average.

Exports accounted for more than 80% of all cars produced, which the SMMT says demonstrates “the need for smooth international trade, especially with the EU, as new customs controls with the bloc come into effect on 1 January 2022”. 

The SMMT cites the ongoing semiconductor shortage as a primary factor in the downturn. Chief executive Mike Hawes called the figures “extremely worrying” and said the global supply chain crisis is “likely to affect the sector throughout next year”.

He added: “With an increasingly negative economic backdrop, rising inflation and Covid resurgent home and abroad, the circumstances are the toughest in decades. With output massively down for the past five months and likely to continue, maintaining cashflow, especially in the supply chain, is of vital importance.

“We have to look to government to provide support measures in the same way it is recognising other Covid-impacted sectors.

“The industry is as well prepared as it can be for the implementation of full customs controls at UK borders from 1 January but any delays arising from ill-prepared freight or systems will place further stress on businesses that operate ‘just in time’. Should any problems arise, contingency measures must be implemented immediately to keep cross border trade flowing smoothly.”