Automotive manufacturing within the UK stalled dramatically final 12 months. The pinnacle of the business commerce physique described the state of affairs because the “hardest in a long time”, and the numbers actually again up his declare.
The newest automotive registration figures present that 2021 was up simply 1% on a COVID-ravaged 2020 – and manufacturing really went into reverse gear.
In November 2021, UK automotive manufacturing dropped by nearly 29%, the fifth consecutive month of output falling, and the worst because the mid-Eighties. October’s figures had been the worst because the Fifties.
Total, automotive making as much as November 2021 was 6.2% under that of 2020, with 797,261 vehicles made – worse even than a 12 months during which UK manufacturing was so badly affected by manufacturing unit stoppages attributable to the primary lockdowns.
This issues not just for the 180,000 folks employed straight in auto manufacturing or the 864,000 jobs throughout the broader automotive business. The business accounts for 13% of whole UK export of products, value £44 billion, and invests £3 billion annually into automotive analysis and improvement.
Neither is this simply a difficulty for the UK. The worldwide microchip scarcity had a significant affect in 2021, and will price the worldwide auto business as a lot as US$210 billion (£155 billion) in misplaced gross sales in 2022, with output curtailed by nearly 8 million autos.
Of the vehicles that had been made within the UK, over 80% had been resulting from be exported, with most of these (some 60%) certain for the EU. Asia accounted for 15.6% of UK automotive exports, the US 13.4% and Australia 1.2% (that new commerce take care of Australia is welcome however gained’t actually enhance UK automotive exports a lot). Total, exports to the EU fell by 29% in comparison with the identical interval in 2020, with extra dramatic falls additional afield, down by 57% to Japan and by 67% to the US.
Now the chief government of the Society of Motor Producers and Merchants, Mike Hawes, has known as for extra assist for the business. He additionally flagged up dangers round new customs preparations between the UK and EU that come into impact from January 1 2022.
He stated: “With an more and more unfavorable financial backdrop, rising inflation and Covid resurgent dwelling and overseas, the circumstances are the hardest in a long time.
“With output massively down for the previous 5 months and more likely to proceed, sustaining cashflow, particularly within the provide chain, is of significant significance. We have now to look to authorities to offer assist measures in the identical manner it’s recognising different COVID-impacted sectors.”
A smoother journey
Wanting forward, a new manufacturing outlook report forecasts that UK automotive and van manufacturing might edge above a million in 2022, and even attain 1.2 million in 2024. Again in 2016, the UK produced 1.7 million a 12 months. However that now appears a really very long time in the past, with output broken ever since by a mix of world markets, Brexit uncertainty, and COVID-related provide chain points.
Long run, the auto business has to take care of probably the most pronounced change in its historical past, with a fast shift now underway in the direction of battery powered electrical autos. The UK authorities has set a 2030 deadline to section out the sale of petrol and diesel vehicles, however insurance policies to truly get there appear half-hearted.
Progress shouldn’t be helped for instance, by the gradual pace of charging infrastructure roll out, or the large lower in subsidies out there for brand new battery electrical autos which suggests many don’t qualify for assist.
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On a optimistic be aware, British manufacturing of battery electrical autos and hybrid vehicles (with a combustion engine and a battery) took a document share of manufacturing in 2021, accounting for round a 3rd of all vehicles made in November, and greater than 1 / 4 (26%) over the 12 months.
Of these, battery electrical car output was up in November by 53% to 10,359 items, hitting a brand new excessive of just about 14% of manufacturing, greater than double the extent a 12 months in the past. UK-based automotive makers like Nissan, MINI and the London Electrical Automobile Firm produced greater than 60,000 zero emission autos in 2021.
However UK battery manufacturing is lagging behind main funding throughout the EU, which is aiming to be unbiased in battery manufacturing by 2026, and has introduced collectively seven nations to type the European Battery Alliance. And whereas there’s confirmed funding in only one battery “gigafactory” within the UK, there are no less than 15 beneath building in nations together with Sweden, France, Germany, Hungary and Poland.
Funding in battery manufacturing within the UK will have to be accelerated dramatically given the shift to electrical autos now underway. Past that, higher and extra joined-up assist for the auto business will likely be wanted to get to 2030 with a viable mass UK auto business intact.