The UK car industry has warned of challenges just to remain operational after it produced just shy of 65,000 cars last month – the weakest October since 1956.
The Society of Motor Manufacturers and Traders (SMMT) blamed “production stoppages” linked to the shortage of semiconductors globally for the woeful total, adding that a resurgent coronavirus pandemic could make things worse in the months ahead.
The chip shortage is tipped, according to consulting firm AlixPartners, to cost the world’s automotive industry $60bn (£45bn) in lost sales this year.
The lack of chips – a result of COVID-19 disruption that has left supply lagging high demand – has hampered sectors across the factory economy from gaming console producers to defence.
It has also damaged the transition towards the electric car future – demanded by this country’s government ahead of the looming ban on the sale of new vehicles powered by petrol and diesel engines from 2030.
The production problems have helped power too the country’s intensifying inflation rate.
That is because the lack of new vehicles has pushed up prices across the auto sector, with second-hand cars shooting up in value in particular.
The SMMT said the total number of cars produced in October was 41% down on the same month last year.
The decline was exacerbated by the permanent closure of Honda’s Swindon plant in July.
“More positively, production of the latest battery electric (BEV), plug-in hybrid (PHEV) and hybrid (HEV) vehicles comprised 30.9% of all cars made in October,” the SMMT said.
“BEV manufacturing rose 17.5% to 8,454 units, meaning that, so far this year, UK car makers have produced more than 50,000 zero emission vehicles, exceeding the total built in the whole of the pre-pandemic 2019.”
Jaguar Land Rover, Britain’s biggest car producer, has forecast a “gradual recovery” in chip availability from the spring though the SMMT fears it will be 2023 before supplies return to normal levels.
Chief executive Mike Hawes said of October’s production data: “These figures are extremely worrying and show how badly the global semiconductor shortage is hitting UK car manufacturers and their suppliers.
“Britain’s automotive sector is resilient but with COVID resurgent across some of our largest markets and global supply chains stretched and even breaking, the immediate challenges in keeping the industry operational are immense.”