UK car production slumps to 66-year low as chip shortages and factory closures bite

Car production in the UK slumped to its lowest level in more than 60 years last year.

New data from the Society of Motor Manufacturers and Traders (SMMT) shows an almost 10% drop in production in 2022, largely due to the global shortage of semiconductor chips. The total of 775,014 cars was the lowest since 1956, the trade body said.

According to the SMMT, output in December reflected a volatile 12 months, with output down 18% year on year, following growth in October and November. The annual total for 2022 was 40.5% down on pre-coronavirus levels in 2019.

The number of cars built for the UK market was up almost 10% on 2021 but domestic sales account for just 20% of cars built in the UK, with the other 80% being shipped overseas. Production for that market fell 14%, the figures showed.

The SMMT said the global shortage of semiconductor chips limited the ability of car makers to build vehicles in line with demand. It added that the figures reflected the closure of Honda’s factory in Swindon in July 2021 and the decision by Stellantis to stop producing the Vauxhall Astra in Ellesmere Port in April 2022.

Record levels of electrified vehicles were produced, with almost a third of all cars made either fully electric or hybrid. They were worth £10 billion in exports alone, according to the SMMT.

The industry body’s chief executive, Mike Hawes, said: “These figures reflect just how tough 2022 was for UK car manufacturing, though we still made more electric vehicles than ever before – high-value, cutting-edge models, in demand around the world.

“The potential for this sector to deliver economic growth by building more of these zero-emission models is self-evident; however, we must make the right decisions now.

“This means shaping a strategy to drive rapid upscaling of UK battery production and the shift to electric vehicles based on the UK automotive sector’s fundamental strengths – a highly skilled and flexible workforce, engineering excellence, technical innovation and productivity levels that are among the best in Europe.”

Electric car battery start-up Britishvolt collapsed last week with the loss of nearly 300 jobs. It had plans to build a giga-factory in Northumberland but failed to raise enough funding.

A Government spokesperson said: “We are determined to ensure the UK remains one of the best locations in the world for automotive manufacturing.

“Our success is evidenced by the £1 billion investment in Sunderland in 2021, and we are building on this through a major investment programme to electrify our supply chain and create jobs.”