Chip shortage and lockdown: British car production at 1956 levels

Status: 01/27/2022 10:23 a.m

The British auto industry produced fewer vehicles in 2021 than it did in 65 years. In addition to the lack of chips and the consequences of the pandemic, a plant closure is also causing problems for the industry.

The number of cars made in Britain fell to its lowest level since 1956 last year. According to industry body SMMT, just 859,575 vehicles were made in the UK in 2021. That was another 6.7 percent less than in the first Corona year 2020. Production even fell by 12.7 percent year-on-year in December.

“2021 was another incredibly difficult year for British car manufacturing – one of the worst since the Second World War,” said Mike Hawes, chief executive of the Confederation of British Motor Vehicle Manufacturers and Dealers (SMMT).

Above all, the global chip shortage and lack of semiconductors made things difficult for the industry last year. Factories had to reduce or even pause their production because important primary products were missing. In addition, there was a shortage of workers who had to self-isolate in the event of a corona infection. Due to strict contact and exit restrictions, car dealerships remained closed for a long time in 2021.

Factory closure causes burglary

But even in addition to the corona pandemic, there are reasons for the “pathetic year”, as the SMMT called it. The closure of the Honda plant in Swindon, west of London, is responsible for around a quarter of the decline. the company closed the plant last summer. The end came after the British voted for Brexit in 2016 and the EU and Japan agreed on duty-free car imports in 2017.

However, the British economy has now largely recovered from the Corona crisis and returned to pre-pandemic levels in November.

optimism in the industry

The industry association is nevertheless optimistic about the future. Investments in 2021 were significantly higher than in previous years at £4.9 billion. The trade agreement with the EU after Brexit will provide relief despite some new bureaucratic obstacles, said association boss Hawes. He was also confident that the chip shortage would soon be resolved. It is expected that more than one million vehicles will be produced in Great Britain again in 2022.

The British industry is also giving hope to the electric car market: more than a quarter of the cars registered in 2021 had an alternative drive, and every twelfth vehicle was purely battery-powered. This corresponds to an increase of around 72 percent. The British government intends to ban new combustion engines from 2030 onwards. However, the high and rising energy prices remained a danger, said Hawes.

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