The sagging UK automobile industry is moving too slowly in the production

The sagging UK automobile industry is moving too slowly in the production

Manufacturing of cars in the UK was a major slowdown in the last year. The chief of the industry trade body described the present situation as being “toughest in decades”, and the figures confirm his assertion..

The most recent figures on car registrations reveal the 2021 year was just 1% more on a COVID ravaged 2020 – and that production fell into reverse.

The month of November 2021 saw UK automobile production fall by nearly 29 percent. It was the fifth consecutive month of declining output and the lowest ever since the mid-80s. The October figures were the lowest in the 50s.

In total, the number of cars made until November 20, 2021, was 6.2 percent less than 2020, with 797,261 vehicles produced – worse than the previous year, when UK production was severely affected by the factory shutdowns due to one of the initial lockdowns.

It’s not just about the 180,000 workers working directly within auto manufacturing, but also the 864,000 jobs in the entire automotive industry. This industry is responsible for 13 percent of the UK export of goods valued at PS44 billion. It also invests PS3 billion every year in research and development in the automotive industry.

This isn’t only a problem for the UK. The worldwide chip shortage has had a significant impact in 2021. It could cost the auto industry around USD 210 billion (PS155 billion) in lost sales in 2022, and production cut by more than eight million cars.

Of the vehicles produced in the UK, more than 80% were scheduled to be exported, and the majority of them (some 60 percent) headed for the EU. Asia represented 15.6 percent of UK exports of cars, followed by the US 13.4 percent and Australia 1.2 1 % (that recent trade agreement that was signed with Australia is welcomed, but it won’t help UK exports of vehicles substantially). Exports to the EU dropped by 29% when compared to the same timeframe in 2020. However, there were greater declines further away in the US, which was down 57 percent to Japan and 67 percent towards the US.

The head of the Society of Motor Manufacturers and Traders, Mike Hawes, has called for greater assistance for the industry. He also warned of the dangers of the new customs arrangement between the UK and the EU, which take effect on January 1, 2022.

He stated: “With an increasingly negative economic outlook with rising inflation, a deteriorating economy, and Covid revival at home and abroad, The current conditions are among the most challenging in a long time.

“With output massively down for the past five months and likely to continue, maintaining cashflow, especially in the supply chain, is of vital importance. We have to look to government to provide support measures in the same way it is recognising other COVID-impacted sectors.”

A smoother ride

In the future Looking ahead, the updated production forecast report predicts for the future that UK automobile and van manufacturing could climb over one million by 2022 and could even rise to 1.2 million by 2024. In 2016 in 2016, the UK was producing 1.7 million annual production. It’s an extremely lengthy time ago and the production slowed since then due to the combination of global markets, Brexit uncertainty, and COVID-related supply chain problems.

In the longer term, the automobile sector is expected to face the biggest shift in its history as it moves rapidly that is currently underway to battery-powered electric automobiles. In the UK, the UK government has announced an 30th of March 2030 as the date to eliminate the sales of diesel and petrol cars and trucks, however the plans to achieve this seem a bit shaky.

It is not helped, in any way, for instance, due to the slow pace that charging infrastructure rolling out, or the massive reduction in the subsidies available to new battery electric vehicles, which means that a lot of them do not have the right to support.

Positively, British manufacture of batteries electric cars as well as hybrid vehicles (with combustion engines and battery) has reached an record proportion of the market in 2021 which accounted for about 1/3 of the vehicles manufactured in November, and more than 25% (26 percent) in the course of the course of.

Of these the battery electric vehicle production increased during November, by 53%, reaching 10,359 units. It also reached a record of 14% of the production, nearly two times the rate of production one year ago. British-based car manufacturers like Nissan, MINI and the London Electric Vehicle Company produced more than 60,000 zero-emission vehicles by 2021.

However, UK manufacturing of batteries is slowing down significant investment across the EU, which aims to be completely independent of battery production by 2026 and has gathered seven countries into the European Battery Alliance. While there is a confirmed investment of just one “gigafactory” in the UK, There are at most fifteen factories in construction in other countries such as Sweden, France, Germany, Hungary, and Poland.

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