UK car production rises, but so do energy costs

Is the global lack of car parts starting to lift?

The effects of the pandemic have plagued UK car manufacturing for years, with supply chain shortages, structural changes and weak exports reducing output tenfold. But the last three months have seen a rise in production, bring fresh hope that the industry may recover. 

However, all is not rosy. SMMT is now concerned about how ‘alarming’ high energy costs might hinder the UK’s return to the global market.

The UK motor industry is back in action 

Society of Motor Manufacturers and Traders (SMMT) reported that 58,043 vehicles were built this July, 8.6% more than during the same month last year. About a third of these were either electric or hybrid. 

Production for the UK market surged by 40.7% to 11,583 vehicles, and exports only went up slightly by 2.8%.  

Shipping dominated the sector, accounting for eight out of ten cars, while exports to top markets the EU and US dropped slightly, by 7.3% and 22.8% respectively. Orders from China and Japan rose by 54% and 40.1% 

Getting UK car manufacturing back on the map 

Despite the recent increase in output, car production levels are only about half of what they were pre-pandemic, showing the UK still has a way to go to regain its space in the global market. However, with energy costs skyrocketing, the UK may battle to remain competitive.   

SMMT chief executive Mike Hawes said: “A third consecutive month of growth for UK car production is, of course, welcome and gives some hope that the supply chain issues blighting the sector may finally be starting to ease. But other challenges remain, not least energy costs which are increasing at alarming rates. 

“If we are to attract much-needed investment to drive the production of zero-emission vehicles, urgent action is needed to mitigate these costs to make the UK more competitive for manufacturing.  

“This must be a priority for the next Prime Minister else we will fall further behind our global rivals, risking jobs and economic growth.” 

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