Supply chain challenges hit UK car production

Car production in the UK took a hit in July, falling by 14.4% as model changeovers and supply chain constraints restricted output, according to new figures from the Society of Motor Manufacturers and Traders (SMMT).

Some 65,478 vehicles were produced in the month, but despite an 18.6% decline in volume, electrified (battery electric, plug-in hybrid and hybrid) vehicle manufacturing maintained a relatively stable 37.5% share of output, compared with 39.5% in July 2023.

Mike Hawes, SMMT chief executive, said: “Following significant growth last year, some readjustment in output was to be expected.

“Indeed, an ongoing degree of volatility is likely as the industry restructures to transition to zero emission vehicle production.

“As the billions already committed to new models start to deliver a return, volume growth will resume, providing we seize every opportunity to enhance our global competitiveness.

“We need investment in skills, healthy markets, cheaper green energy, and fair trade deals that help British-built vehicles reach international customers more easily, all of which should be wrapped in an over-arching industrial strategy that ensures automotive continues to be a key driver of economic growth.”

Production for the UK market fell by 5.1%, although in volume terms this represented just 672 fewer units.

More than four in five (80.9%) cars produced in July were destined for customers overseas, with the five largest markets by volume encompassing the EU (51.3% of exports), US (17.6%), China (8.6%), Turkey (5.5%) and Japan (3.1%).

Total export volumes for the month fell by 16.3%.

Year-to-date, domestic production remains up 14.8% while export volumes are down 14.3%. However total output was still calculated to be worth more than £20 billion at factory gate prices – unchanged on the same period last year.

Richard Peberdy, UK head of automotive for KPMG, said: “So far in 2024, car production for the domestic market is up, driven by demand from fleet buying, but the drop-off in manufacture for export has left overall production volumes down on this time last year. 

“Production has also been slowed by car makers having to further gear up factory floors for new EV and hybrid models and an increasingly electric future.

“With car makers mandated to scale-up the percentages of electric vehicles that they sell each year, questions continue to remain about how industry and government can increase new electric vehicle sales in keeping with the levels required by the Zero Emission Mandate.”