Carmakers boost output as semiconductor shortage eases
British carmakers boosted their output by over 13 per cent in February as supply chain pressures eased – particularly with regards to the ongoing semiconductor shortage.
According to the Society of Motor Manufacturers and Traders (SMMT), factories made an additional 8,050 cars year-on-year during the month after two years of difficulty acquiring enough semiconductors.
The chip shortage was largely caused by Covid-related supply chain disruptions and the increase in demand that followed the move to remote working. The ongoing trade war between the US and China also played a role in restricting supply.
Last year, US commerce secretary Gina Raimondo warned that the sector would continue to struggle to meet demand through 2023.
The SMMT report also showed that sales of hybrid and battery electric vehicles continued to increase, up 72.2 per cent year-on-year, accounting for two in five cars produced in the month.
A survey of the body’s members showed that nine in 10 firms want measures to deliver a low-carbon and cost-effective energy supply, to help support the transition to zero-emission technologies.
Overall production for both home and overseas markets rose by double digits, up 20.3 per cent and 11.5 per cent respectively, with exports driving the overall uplift. Shipments to the EU rose by 6.5 per cent, which helped to offset declines to the US (-19.9 per cent) and China (-21.6 per cent).
While automotive businesses are broadly optimistic about the next 12 months, more than eight in 10 report that input and employment costs have risen in the past three months, so action to alleviate cripplingly high and uncompetitive energy costs ranks as their number one concern.
“February’s growth in UK car production signposts an industry on the road to recovery,” said Mike Hawes, SMMT chief executive.
“The fundamentals of the sector are strong; a highly skilled workforce, engineering excellence, a sector that is embracing new electrified vehicle manufacturing and wide-ranging capabilities in the EV supply chain.
“To take advantage of global opportunities, however, we must scale up at pace and make the UK the most attractive destination for automotive investment by addressing trading and fiscal costs and delivering low-carbon, affordable energy.”
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