UK automotive manufacturing falls to lowest stage since 1956 amid chip scarcity
Simon Dawson | Bloomberg | Getty Photos
The Society of Motor Producers and Merchants mentioned Thursday that U.Ok. producers constructed simply 53,438 automobiles in July, marking a 37.6% drop on July 2020.
A worldwide semiconductor scarcity, manufacturing facility shutdowns and employee absences amid the continued coronavirus pandemic all contributed to the decline, SMMT mentioned.
Whereas July was a very dangerous month, automotive manufacturing throughout U.Ok. factories is up 18.3% year-to-date in comparison with 2020, when Covid restrictions meant folks could not go to work.
Some 552,361 vehicles have been constructed within the U.Ok. since January, however that is nonetheless 28.7% down on 2019 pre-pandemic ranges.
Mike Hawes, SMMT Chief Govt, mentioned in an announcement that the figures “lay naked the extraordinarily powerful circumstances UK automotive producers proceed to face.”
“Whereas the affect of the ‘pingdemic’ will reduce as self-isolation guidelines change, the worldwide scarcity of semiconductors reveals little signal of abating,” Hawes mentioned.
The so-called “pingdemic” referred to folks receiving notifications on their telephones telling them to self-isolate for a number of days in the event that they got here into contact with somebody who examined constructive for Covid-19.
Why is the automotive trade struggling?
The U.Ok. is making extra electrical vehicles, which have considerably extra chips in them, than ever earlier than.
Roughly 26% of the vehicles constructed by U.Ok. producers in July had been both battery electrical, plug in hybrid, or hybrid electrical, SMMT mentioned, including that it is a new file. It mentioned U.Ok. automotive factories have turned out 126,757 of those merchandise for the reason that begin of the yr.
A number of automotive producers cancelled semiconductor orders at first of the pandemic as a result of they had been involved a few drop in gross sales. However when gross sales recovered quicker than anticipated, the automotive giants discovered themselves on the finish of the road for chips.
Sweden’s Volvo, Germany’s Volkswagen and Japan’s Toyota all introduced this week that they should scale back manufacturing additional if there may be not an pressing resolution to the chip disaster.
German know-how and engineering group Bosch, which is the world’s largest car-parts provider, informed CNBC this week that semiconductor provide chains within the automotive trade are not match for function.
Harald Kroeger, a member of the Bosch administration board, mentioned Monday that offer chains have buckled within the final yr as demand for chips in every part from vehicles to PlayStation 5s and electrical toothbrushes has surged worldwide.
The automotive trade is a vital cog within the U.Ok. economic system, producing over £78.9 billion ($108.4 billion) a yr. Roughly 180,000 folks work in manufacturing whereas 864,000 are employed within the wider provide chain.
Roughly 30 producers are constructing 70 automotive fashions within the U.Ok. at current. That features native companies equivalent to Jaguar Land Rover, Vauxhall and Rolls-Royce, in addition to worldwide companies like Ford and Nissan.