Dismal year for UK car output but investment recovery and electrified charge brighten outlook

- Car production falls -6.7% to 859,575 units due to multiple factors, most Covid-related.

- UK electrified vehicle output surges, up 29.6%, to more than a quarter of production.

- Factories turn out record number of battery electric vehicles, volumes up 72.0%.

- Grounds for optimism in 2022 with potential £4.9 billion of investment announced and production forecast to begin recovery.

LONDON, Jan. 27, 2022 /PRNewswire/ -- UK car production in 2021 fell -6.7% to only 859,575 units, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT), the worst total since 1956^[1]. Output was 61,353 less than 2020, which itself was badly affected by coronavirus lockdowns, and -34.0% below pre-pandemic 2019^[2].

Despite this, British car factories produced a record number of battery electric (BEV), plug-in hybrid (PHEV) and hybrid electric vehicles (HEV), turning out almost a quarter of a million (224,011) of these zero and ultra-low emission vehicles, representing more than one-in-four (26.1%) of all cars made.

The overall poor performance can be attributed to several factors, most of them direct consequences of the pandemic. The shortage of semiconductors, a critical component in modern car manufacturing, was the principal cause of the decline, with factories having to reduce or even pause production while awaiting parts whose supply has been heavily constrained by the global pandemic.

Manufacturers also wrestled with staff shortages arising from the need to self-isolate and depressed demand with car showrooms closed for months due to lockdowns and despite the success of 'click and collect' services. There were also non-Covid issues behind this fall, most notably the closure of a major UK car plant in July, which accounted for around a quarter of the annual decline.

More positively, the shift to electrified vehicle manufacture continued apace as BEV production surged 72.0%, while hybrids rose 16.4%, as the UK industry – like the market – transforms into a low and, ultimately, zero-carbon industry.

Global exports continued to be the foundation for UK car manufacturing, with some eight-in-ten cars made being shipped overseas. Although annual production for overseas markets declined -5.8% to 705,826 units, volumes for the domestic market declined even more steeply, down -10.6% to 153,749.