Car production in the UK fell 19.2% in the first six months of 2022 primarily due to a shortage of key components. 

Data released by the industry trade body Society of Motor Manufacturers and Traders (SMMT) shows that 403,131 units were built during the period. 

Shortage of semiconductors, worsened by the supply chain issues due to the Russia-Ukraine war along with the structural and model changes within the sector are the main causes for the decline of production, says SMMT.

In June, car production in the UK increased by 5.6% with 72,946 units built, however, the output remains 33.2% below 2019 levels.

The fall in export volumes led to the year-to-date decline and during the period, 23.9% fewer cars were produced for exports during the first half of 2022.

In contrast, the production of battery electric vehicles (BEVs) saw an increase of 6.5%, with 32,282 units produced in the first half of the year. This was supported by a 44.2% rise during June.  

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By GlobalData

Meanwhile, the output of hybrid, petrol, and diesel cars slumped by 19.9%, 8.0% and 60.2% respectively in the first half of 2022.

New industry production outlook estimates suggest that 866,000 cars are anticipated to be produced this year. 

Despite the fall in production, SMMT data shows that more than £3.4bn investment, primarily for EV production and supply chains, has been announced so far in 2022.

SMMT chief executive Mike Hawes said: “Car manufacturers have been suffering from a ‘long Covid’ for much of 2022, as global component shortages undermine production and put supply chains under extreme pressure. 

“Key model changeovers and the closure of a major plant last year have also impacted output, but there are grounds for optimism with rising output over the last two months. 

“As these issues recede over the next year or two, investment in new technologies and processes will be essential but this will depend on our underlying competitiveness. 

“Sky-high energy costs, non-competitive business rates and skills shortages must all be addressed if we are to build on our inherent strengths and seize the opportunities presented by the dash for decarbonised mobility.”

Earlier this week, INDICATA Market Watch insights’ latest report revealed that the UK is the only market in Europe where used car prices are falling.