Britain’s automotive sector churns up productions, caught up chip shortage whirlpool

In the first half of this year, although car production in Britain has risen by nearly a third from last year’s slump, volumes are however down on the five-year average with the coronavirus-induced COVID-19 pandemic continuing to cause staffing and supply issues.

While factories went into lockdown in March 2020, they began operating with protective measures this year; a global shortage of chips has also contributed to lower production.

In the first six months of this year, auto production jumped by an annual 31% to 498,923 vehicles, helped by a 22% increase in June, said industry body the Society of Motor Manufacturers and Traders (SMMT).

“The global shortage of semiconductors is having an … unpredictable effect,” said SMMT chief Mike Hawes. “All manufacturers are having trouble seeing exactly where their supplies are going to come from and how they are going to distribute them across their numerous plants around the world.”

Production volumes are likely to remain below 1 million this year following a bigger-than-previously-expected shortage of chips, said SMMT citing an independent forecast.

Britain’s automotive sector is also adjusting to post-Brexit trading relationship with the EU – its biggest export market.

Between January to June, this year, the sector saw a 25% rise in investment, compared to the previous year for the same period, to $841 million (606 million pounds).

Earlier this month, major automakers including Stellantis and Nissan made fresh investment commitments, while the sector pushes for more investment in battery factories.

“We know there are discussions going on,” said Hawes.

($1 = 0.7208 pounds)

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