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Monday, March 27, 2023

SMMT: UK automobile manufacturing down however electrical car output surges to new file

Annual UK automobile manufacturing falls -9.8% to 775,014 models in 2022 as world chip shortages and structural adjustments depress output

UK automobile manufacturing declined -9.8% in 2022 to 775,014 models, in keeping with the most recent figures issued in the present day by the Society of Motor Producers and Merchants (SMMT). December rounded off a unstable 12 months, with output down -17.9% within the month after progress in October and November, with a lot of the 12 months’s quantity loss occurring within the first half.

The annual complete was 84,561 models down on 2021 and -40.5% off the 1,303,135 vehicles made in 2019 pre-pandemic, equal to a lack of greater than half 1,000,000 vehicles.1 The primary causes for the depressed output have been the crippling world scarcity of semiconductors, which restricted the power to construct vehicles in step with demand; vital structural adjustments, reflecting a lack of manufacturing at two quantity manufacturing websites; and the impression of provide chain pauses in China resulting from Covid lockdowns.

Regardless of these challenges, UK factories turned out a file 234,066 battery electrical (BEV), plug-in hybrid (PHEV) and hybrid (HEV) electrical autos, with mixed volumes up 4.5% year-on-year to symbolize nearly a 3rd (30.2%) of all automobile manufacturing. Whole BEV manufacturing rose 4.8%, with hybrid volumes up 4.3%, and boosting output of those autos can be crucial within the attainment of internet zero, for each the UK and main abroad markets.

The figures come as recent SMMT evaluation confirms the more and more vital function of electrified car manufacturing to the UK financial system, particularly the worth of exports. Since 2017, the worth of BEV, PHEV and HEV exports has risen seven-fold, from £1.3 billion to greater than £10 billion. In consequence, electrified autos symbolize 44.7% of the worth of all UK automobile exports, up from a mere 4.1%. BEVs, specifically, are crucial to the longer term prosperity of the UK, with their export worth up greater than 1,500%, from £81.7 million to £1.3 billion.2

The UK’s power in specialist, luxurious and efficiency automobile makers was additionally additional underlined, with output climbing 6.6% to 32,575 models, value an estimated complete of £3.7 billion at manufacturing facility gate costs, pushed by various new launches and fashions in excessive demand from consumers all over the world. These producers play an vital function within the growth of superior automotive applied sciences resembling light-weighting and electrification which, in flip, can assist advance wider trade.

Whole annual output for the UK market grew 9.4%, however this was not sufficient to offset a -14.0% drop in exports. Practically eight in 10 vehicles (606,838 models) have been constructed for abroad markets, in contrast with 168,176 for British consumers, emphasising the significance of free and honest world commerce.

The EU remained by far the sector’s largest market, whilst shipments declined -10.0%, with 57.6% of exports (349,424 models) heading into the bloc. Whereas exports to the US and China additionally fell, down -31.6% and -8.3% respectively, the variety of vehicles despatched to Japan (+5.7%), South Korea (+32.8%), Australia (+4.7%), Switzerland (+2.7%) and South Africa (+23.0%) all elevated, though collectively these represented simply 8.4% of exports. Exports to Russia, a high 10 export market in 2021, in the meantime, fell -78.3%, with shipments made earlier than the outbreak of conflict in Ukraine and the cessation of enterprise.

Mike Hawes, SMMT Chief Government, mentioned,

These figures mirror simply how robust 2022 was for UK automobile manufacturing, although we nonetheless made extra electrical autos than ever earlier than – excessive worth, innovative fashions, in demand all over the world. The potential for this sector to ship financial progress by constructing extra of those zero emission fashions is self-evident, nonetheless, we should make the correct choices now.

This implies shaping a method to drive speedy upscaling of UK battery manufacturing and the shift to electrical autos primarily based on the UK automotive sector’s elementary strengths – a extremely expert and versatile workforce, engineering excellence, technical innovation and productiveness ranges which might be amongst the very best in Europe.

Even amid the robust financial and political setting, UK Automotive is integral to ambitions on levelling up, delivering internet zero and advancing world Britain. In 2022, publicly introduced funding for the sector reached a complete of £4.5 billion, with main new commitments to electrification in Crewe and Merseyside. This was down barely from the potential £4.9 billion introduced in 2021, which included the proposed growth of a brand new battery gigafactory within the West Midlands.3

Given the worldwide and home challenges, trade is on the lookout for a devoted framework to place the UK as one of many world’s best areas for superior automotive manufacturing. This framework should tackle hovering power prices and the specter of growing world protectionism, present fiscal measures to encourage funding in zero emission applied sciences and equip the UK’s proficient workforce with the correct expertise to ship these autos.

Wanting ahead, the most recent impartial outlook expects that, with easing semiconductor shortages, UK automobile and light-weight van output ought to rise by 15% to 984,000 models in 2023 (842,200 vehicles and 141,800 gentle vans), an uplift value some £3.9 billion. By 2025, manufacturing volumes are projected to surpass 1,000,000 autos.4

1 – 528,121 models misplaced
2 – SMMT calculations primarily based on HMRC and SMMT information and masking the interval 2017-2022
3 – SMMT calculations primarily based on new, publicly introduced funding choices in 2022 masking deliberate commitments to recent spend on new product, tooling, gear or services / factories for the automotive sector
4 – Primarily based on Auto Evaluation Manufacturing Outlook (November 2022) focusing on manufacturing output of 852,709 vehicles and vans in 2022, 983,610 in 2023, 971,465 in 2024 and 1,040,700 in 2025


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