July Car Production In UK Hit Lowest Level Since 1956

Car manufacturing in the United Kingdom declined in July to its lowest for the month for the entire industry since 1956, showed data available from a trade group.

There was a 37.6 per cent year on year drop in cars manufactured in the UK in July at just 53,438 vehicles, said the Society of Motor Manufacturers and Traders on Thursday.

The trade group said that the historic monthly decline was because of a number of factors including the ongoing Covid-19 pandemic, a global shortage of semiconductor chips for cars, temporary shutdown of production and factories and absences of workers.

Even though car production in July was very bad, the production across UK factories had increased by 18.3 per cent year-to-date compared to the same period last year when workers were unable to go to work because of the Covid-19 restrictions and lockdowns. 

Since January this year, UK car makers have made 552,361 cars which is fewer by 28.7 per cent for the same period of 2019 – prior to the pandemic hit.

The figures “lay bare the extremely tough conditions UK car manufacturers continue to face,” said Mike Hawes, SMMT Chief Executive, in a statement. “While the impact of the ‘pingdemic’ will lessen as self-isolation rules change, the worldwide shortage of semiconductors shows little sign of abating,” Hawes said.

The now infamous “pingdemic” referred to people in the country receiving notifications on their phones about them to self-isolate for a number of days as they ostensibly had come into contact with someone who later tested positive for Covid-19.

New vehicles have dozens of microchips in them to control everything from power steering and car stereos to acceleration and electric windows.

More electric cars are being made in the UK than ever before which means the car makers now require more of the auto chips than before.

SMMT said that roughly 26 per cent of the total cars manufactured in the country in July were either battery electric cars, or either battery electric vehicles. The trade body added that this proportion is also a new record for the industry. Since the beginning of the year, 126,757 of these products have been made by UK car factories, SMMT said.

At the beginning of the pandemic, orders for semiconductor chips were canceled by a number of car manufacturers because of their concerns of a decline in sale for cars during the pandemic. However, sale of cars recovered faster than expected after the first wave of the pandemic which left the car makers out of chips and being forced ot wait for days for delivery of chip orders placed.

Announcements of potential curbing of production of vehicles further if the current global shortage of chip was not resolved on an urgent basis were made earlier this week by several auto majors including Sweden’s Volvo, Germany’s Volkswagen and Japan’s Toyota.

Semiconductor supply chains in the automotive industry are no longer fit for purpose, said German technology and engineering group Bosch, which is the world’s largest car-parts supplier.

(Adapted from CNBC.com)



Categories: Economy & Finance, Geopolitics, Regulations & Legal, Strategy, Sustainability, Uncategorized

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