Chip shortage slows car production as production falls by a third in July

UK car production fell by 37.6 per cent, its worst July performance since 1956, official figures show.

A total of just 53,438 engines rolled off assembly lines at UK factories last month as manufacturers recorded the first drop in output since February.

Company executives said production had collapsed as manufacturers ‘struggled’ with the global semiconductor shortage and with the lack of staff due to the ‘pingdemic’.

Chip shortage dampens production: Car production at UK factories in July fell 37.6% as makers had to suspend production due to lack of parts

Chip shortage dampens production: Car production at UK factories in July fell 37.6% as makers had to suspend production due to lack of parts

Data shows that total production rose by just 18.3 percent (or 552,361 cars) in 2021 compared to last year, when manufacturers were forced to close their operations at the height of the lockdowns and then work with fewer staff.

Compared to the pre-pandemic levels of 2019, production is 28.7 percent behind.

The figures were also the last month production was recorded at Honda’s Swindon plant, with the production line officially shutting down last month when the plant closed and production returned to Japan.

Before the pandemic hit, Honda was the UK’s fifth largest car maker, producing around 110,000 Civic hatchbacks a year.

Honda's UK car factory in Swindon officially stopped making Civics last month, meaning the 110,000 vehicles produced at the site each year will be set off future records.

Honda's UK car factory in Swindon officially stopped making Civics last month, meaning the 110,000 vehicles produced at the site each year will be set off future records.

Honda’s UK car factory in Swindon officially stopped making Civics last month, meaning the 110,000 vehicles produced at the site each year will be set off future records

The biggest pressure on makers right now is undoubtedly the global shortage of semiconductor computer chips, which is causing massive delays for automakers around the world.

Last week, it was reported that Jaguar Land Rover is warning customers of years of waiting times for delivery of some new models as factories have been forced to pause new car construction due to insufficient computer chips.

Volkswagen also said in the past seven days that it expects further production cuts on its vehicles around the world, while Toyota – which has been stocking chips for years – said it was running low and will cut its global auto output by 40 percent from September.

With chip stock shortages showing no signs of easing, some UK carmakers have changed their summer shutdown times to help manage the situation.

This allows them to not only thoroughly clean factories, but also prepare new production lines for the arrival of the latest vehicles.

Company executives said production had collapsed as manufacturers 'struggled' with the global semiconductor shortage and lack of staff due to the 'pingdemic'

Company executives said production had collapsed as manufacturers 'struggled' with the global semiconductor shortage and lack of staff due to the 'pingdemic'

Company executives said production had collapsed as manufacturers ‘struggled’ with the global semiconductor shortage and lack of staff due to the ‘pingdemic’

More than four in five new cars built in the UK were exported abroad last month, with just 53,438 engines produced for customers in Britain

More than four in five new cars built in the UK were exported abroad last month, with just 53,438 engines produced for customers in Britain

More than four in five new cars built in the UK were exported abroad last month, with just 53,438 engines produced for customers in Britain

The SMMT confirmed that production for the UK market fell by a whopping 38.7 per cent to just 8,233 units in July, while export production fell a similar amount (37.4 per cent) with 45,205 cars shipped overseas.

More than a quarter (26 percent) of all cars made in July were either battery electric (BV), plug-in hybrid (PHEV) or hybrid electric (HEV), the highest share ever for alternative fuel vehicles.

It also means that a total of 126,757 greener passenger cars have been made in the UK since the start of the year.

Mike Hawes, CEO of SMMT, said: “These figures expose the extremely harsh conditions UK carmakers continue to face.

“While the impact of the ‘pingdemic’ will diminish as self-isolation rules change, the global semiconductor shortage shows little sign of abating.”

He said the industry is doing ‘what it can to keep production lines running’ and said it was a testament to the adaptability of the UK workforce and its manufacturing processes.

However, Hawes added that it was imperative for the government to continue with the ‘covid support measures’ currently in place so that the sector can increase its competitiveness with a reduction in energy taxes and corporate tariffs.

July's output is the lowest in the month in 65 years.  The last time so few vehicles were built in Britain in a seventh month was just 11 years after the end of WWII

July's output is the lowest in the month in 65 years.  The last time so few vehicles were built in Britain in a seventh month was just 11 years after the end of WWII

July’s output is the lowest in the month in 65 years. The last time so few vehicles were built in Britain in a seventh month was just 11 years after the end of WWII

Commenting on the numbers, Jim Holder, editor-in-chief of What Car?, said the numbers for July – traditionally a slow month for auto sales – have shown the “drastic” impact the chip shortage is having on industry and consumer purchases.

“For new car buyers, this means longer wait times on certain models and fewer options to choose from, while the industry should bounce back after months of Covid restrictions,” he said.

Estimates suggest it won’t be until early 2022 for supply constraints to ease and production levels to recover. Until then, manufacturers have to manage customer demand and expectations.’

Although Holder added that new cars are still in high demand in the UK despite the lack of models available.

He added: ‘The positive news is that the shortage has not deterred customers. Our latest survey of 1,353 buyers in the market found that 35 percent will buy a car within the next four weeks, while 29 percent expect to buy a car within one to three months, indicating a steady stream of pent-up demand until the end of the year. end of the year.

“The challenge for manufacturers is whether they can meet customer expectations.”

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