Automotive manufacturing within the UK stalled dramatically final yr. The pinnacle of the trade commerce physique described the scenario because the “hardest in many years”, and the numbers actually again up his declare.
The most recent automobile registration figures present that 2021 was up simply 1% on a COVID-ravaged 2020 – and manufacturing truly went into reverse gear.
In November 2021, UK automobile manufacturing dropped by nearly 29%, the fifth consecutive month of output falling, and the worst because the mid-Eighties. October’s figures had been the worst because the Fifties.
General, automobile making as much as November 2021 was 6.2% under that of 2020, with 797,261 automobiles made – worse even than a yr during which UK manufacturing was so badly affected by manufacturing facility stoppages attributable to the primary lockdowns.
This issues not just for the 180,000 folks employed immediately in auto manufacturing or the 864,000 jobs throughout the broader automotive trade. The trade accounts for 13% of complete UK export of products, value £44 billion, and invests £3 billion every year into automotive analysis and improvement.
Neither is this simply a problem for the UK. The worldwide microchip scarcity had a significant impression in 2021, and will value the worldwide auto trade as a lot as US$210 billion (£155 billion) in misplaced gross sales in 2022, with output curtailed by nearly 8 million automobiles.
Of the automobiles that had been made within the UK, over 80% had been resulting from be exported, with most of these (some 60%) certain for the EU. Asia accounted for 15.6% of UK automobile exports, the US 13.4% and Australia 1.2% (that new commerce cope with Australia is welcome however gained’t actually increase UK automobile exports a lot). General, exports to the EU fell by 29% in comparison with the identical interval in 2020, with extra dramatic falls additional afield, down by 57% to Japan and by 67% to the US.
Now the chief govt of the Society of Motor Producers and Merchants, Mike Hawes, has referred to as for extra help for the trade. He additionally flagged up dangers round new customs preparations between the UK and EU that come into impact from January 1 2022.
He mentioned: “With an more and more destructive financial backdrop, rising inflation and Covid resurgent house and overseas, the circumstances are the hardest in many years.
“With output massively down for the previous 5 months and prone to proceed, sustaining cashflow, particularly within the provide chain, is of significant significance. We have now to look to authorities to offer help measures in the identical means it’s recognising different COVID-impacted sectors.”
A smoother journey
Wanting forward, a new manufacturing outlook report forecasts that UK automobile and van manufacturing may edge above a million in 2022, and even attain 1.2 million in 2024. Again in 2016, the UK produced 1.7 million a yr. However that now appears a really very long time in the past, with output broken ever since by a mixture of world markets, Brexit uncertainty, and COVID-related provide chain points.
Long term, the auto trade has to cope with probably the most pronounced change in its historical past, with a speedy shift now underway in direction of battery powered electrical automobiles. The UK authorities has set a 2030 deadline to section out the sale of petrol and diesel automobiles, however insurance policies to really get there appear half-hearted.
Progress will not be helped for instance, by the gradual velocity of charging infrastructure roll out, or the massive reduce in subsidies obtainable for brand new battery electrical automobiles which suggests many don’t qualify for help.
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On a optimistic be aware, British manufacturing of battery electrical automobiles and hybrid automobiles (with a combustion engine and a battery) took a report share of manufacturing in 2021, accounting for round a 3rd of all automobiles made in November, and greater than 1 / 4 (26%) over the yr.
Of these, battery electrical automobile output was up in November by 53% to 10,359 items, hitting a brand new excessive of virtually 14% of manufacturing, greater than double the extent a yr in the past. UK-based automobile makers like Nissan, MINI and the London Electrical Automobile Firm produced greater than 60,000 zero emission automobiles in 2021.
However UK battery manufacturing is lagging behind main funding throughout the EU, which is aiming to be unbiased in battery manufacturing by 2026, and has introduced collectively seven nations to kind the European Battery Alliance. And whereas there may be confirmed funding in only one battery “gigafactory” within the UK, there are at the least 15 below development in nations together with Sweden, France, Germany, Hungary and Poland.
Funding in battery manufacturing within the UK will have to be accelerated dramatically given the shift to electrical automobiles now underway. Past that, higher and extra joined-up help for the auto trade can be wanted to get to 2030 with a viable mass UK auto trade intact.
