The prospects of UK automotive manufacturing sector’s future has been labelled “precarious” as stress mounts to speed up funding in zero-emissions electrical automobile (EV) manufacturing following 2022’s 9.8% sector decline.
Society of Motor Producers and Merchants (SMMT) knowledge confirmed that 775,014 models have been constructed final yr as world chip shortages constrained capability, leaving volumes down 84,561 models on 2021 and 40.5% off the 1.3m automobiles made in pre-pandemic 2019 – equal to a lack of greater than half one million automobiles.
It’s the sector’s lowest stage of manufacturing since 1956.
And regardless of a 4.5% improve in different gas automobile (AFV) manufacturing – 234,066 battery electrical (BEV), plug-in hybrid (PHEV) and hybrid (HEV) electrical autos – consideration was drawn to the necessity for extra funding to safe a slice of the automotive manufacturing’s future.
“A lot may be made about the excellent news of the availability constraints easing, however the long-term prospects of the trade stay precarious,” mentioned What Automotive? editorial director Jim Holder.
“The manufacturing figures arrive per week after one of many nation’s largest electrical battery manufacturing tasks closed as a consequence of an absence of funding. If the UK is critical about assembly its electrical automobile ambitions, and critical about remaining a producing hub, pressing funding into electrical automobile battery manufacturing and the availability sector is required.
“If the Britishvolt collapse taught something, it’s that the Authorities must be on the forefront in driving this funding.”
Richard Peberdy, UK head of automotive at KPMG, mentioned: “The market share progress achieved within the UK for electrical autos is robust given the context, however the race for international locations to be seen as world leaders in electrical automobile manufacturing is effectively underway.
“The UK’s place globally for manufacturing electrical autos and components in a lot increased quantity nonetheless is dependent upon funding in battery manufacturing and associated abilities. Presently, it stays unsure the place that’s coming from.”
Significance of AFVs
Unbiased forecasts counsel an easing semiconductor shortages will assist UK automotive and van output to rise 15% to 984,000 models in 2023 (842,200 automobiles and 141,800 vans) with one million autos constructed yearly by 2025.
Nevertheless, recent SMMT evaluation laid naked the more and more essential function of electrified automobile manufacturing to these predictions.
Since 2017, the worth of EV, PHEV and HEV exports has risen seven-fold, from £1.3bn to greater than £10bn.
Consequently, electrified autos signify 44.7% of the worth of all UK automotive exports, up from a mere 4.1% in the identical interval.
The export worth of EVs alone is up greater than 1,500%, from £81.7m to £1.3bn.
However in 2022, publicly-announced automotive manufacturing sector funding was down from £4.9bn (2021) to £4.5bn, regardless of main new commitments to electrification in Crewe and Merseyside.
SMMT chief government Mike Hawes mentioned: “These figures mirror simply how powerful 2022 was for UK automotive manufacturing, although we nonetheless made extra electrical autos than ever earlier than – excessive worth, leading edge fashions, in demand world wide.
“The potential for this sector to ship financial progress by constructing extra of those zero emission fashions is self-evident, nevertheless, we should make the appropriate choices now.
“This implies shaping a method to drive fast upscaling of UK battery manufacturing and the shift to electrical autos based mostly on the UK automotive sector’s basic strengths – a extremely expert and versatile workforce, engineering excellence, technical innovation and productiveness ranges which can be amongst the most effective in Europe.”
Nissan on prime
Nissan secured its place because the UK’s largest automobile producer in 2022, recording volumes up 16.5% in a yr that noticed the Sunderland-built Qashqai SUV grow to be the primary UK-built automotive to grow to be the nation’s best-selling automotive for the reason that Ford Fiesta in 1998.
Elsewhere, the sector suffered the closure of Honda’s Swindon plant, a 70% decline in manufacturing at Vauxhall’s Ellesmere Port because it transitioned to grow to be Stellantis’ European centre for a zero-emissions van manufacturing, and an 8.1% decline in Jaguar Land Rover (JLR) volumes.
Bentley’s volumes rose by 8.6%, in the meantime, as lower-volume manufacturers together with Aston Martin, Caterham, Lotus Vehicles, McLaren Automotive, Morgan and London Electrical Automobile Firm (LEVC) mixed to ship a 4.9% uplift to 16,936 models.
In complete, the SMMT mentioned that the UK’s specialist, luxurious and efficiency automotive makers grew 6.6% to 32,575 models, value an estimated complete of £3.7 billion at manufacturing facility gate costs.
Exports declined by 14% throughout 2022 as an entire.
Whereas complete annual output for the UK market grew 9.4%, the variety of UK-produced automobiles headed to abroad markets declined 14%.
Regardless of this, almost eight-in-10 automobiles (606,838 models) have been constructed for abroad markets.