Car industry bemoans lack of support in Budget – This is Money

Car industry bemoans lack of support in Budget as UK motor production falls for a third consecutive month and September output is lowest since 1982

  • Some 67,169 cars left UK production lines last month, newly published data says
  • Outputs were down 41.5% on last year and the lowest September in 39 years
  • Industry bosses blamed the ongoing global shortage of semiconductor chips
  • SMMT chief exec says the Budget ‘missed the opportunity to offer meaningful short-term support’ to the sector



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The car industry bemoaned a lack of support in the Budget as the number of vehicles built in the UK fell for the third month in a row. 

A total of 67,169 cars left production lines last month, down by 41.5 per cent on the same time last year, and the worst figure for September since 1982, said the Society of Motor Manufacturers and Traders (SMMT) on Thursday.

Output continues to be hit by the global shortage of semiconductors, said the trade body. 

In the slow lane: UK new car output continues to be hit by the global shortage of semiconductors, says motor industry boss as he blasts the Government for failing to offer support to the struggling sector post-Covid

In the slow lane: UK new car output continues to be hit by the global shortage of semiconductors, says motor industry boss as he blasts the Government for failing to offer support to the struggling sector post-Covid

In the slow lane: UK new car output continues to be hit by the global shortage of semiconductors, says motor industry boss as he blasts the Government for failing to offer support to the struggling sector post-Covid

More than eight in 10 (83 per cent) domestic automotive firms have been negatively impacted by the computer chip shortage, primarily due to reduced orders, cost increases, logistical delays and disruption, according to a recent poll by the SMMT and the wider UK manufacturing sector.

The supply chain has spent more than £2.4 billion to date managing additional costs which are unlikely to be recovered, with most (56 per cent) not expecting supply constraints to improve until the third quarter of 2022 and more than a third (38 per cent) having to reduce operating hours to cope with the challenge.

Around one in 10 firms have made redundancies and/or restructured their businesses as a direct result of the lack of semiconductors, while some six in 10 (65 per cent) SMEs sought an extension to the Coronavirus Job Retention Schemes, highlighting the fact that, although the pandemic may be receding, its impact on the sector is still pronounced.

Industry bosses said the worst September for UK car production in 39 years was also due to the recent closure of Honda Swindon, which had been one of the UK’s larger vehicle plants in the county that built the popular Civic family hatchback for the European market. 

Industry bosses said the worst September for UK car production in 39 years was also due to the recent closure of the Honda Swindon plant earlier this year

Industry bosses said the worst September for UK car production in 39 years was also due to the recent closure of the Honda Swindon plant earlier this year

Industry bosses said the worst September for UK car production in 39 years was also due to the recent closure of the Honda Swindon plant earlier this year

It said that while the Budget confirmed £817million for the transition in automotive manufacturing and business rate relief on renewable energy, the industry continues to battle against the ongoing effects of the pandemic. 

Mike Hawes, SMMT chief executive, said that the Budget ‘missed the opportunity to offer meaningful short-term support’. 

‘The substantial decline in UK car output in September continues the worrying trend we have seen over the past three months,’ he explained in a statement today. 

‘The industry is continuing to battle the effects of the pandemic with the shortage of semiconductors stalling production. 

‘Whilst there was welcome news in the Budget to support the transition to zero emission vehicle production, battery manufacturing and supply chains, it missed the opportunity to offer meaningful short-term support given Covid-related supply constraints and rising energy bills. 

‘This is disappointing given the sector’s importance and its ability to create well-paid jobs across the regions and the revenues it generates, notably from exports.’

A total of 67,169 cars left production lines last month, down by 41.5 per cent on the same time last year, and the worst figure for September since 1982

A total of 67,169 cars left production lines last month, down by 41.5 per cent on the same time last year, and the worst figure for September since 1982

A total of 67,169 cars left production lines last month, down by 41.5 per cent on the same time last year, and the worst figure for September since 1982

UK car production year-to-date remains marginally up, by 3.8 per cent, with 656,776 cars rolling off factory lines, which has largely been driven by exports with 82.7 per cent of outputs heading for markets abroad. 

However, this does not paint the full picture, with the year-to-date total down by a third compared with 2019 data.

It’s also a massive 44.1 per cent lower – equivalent to 517,438 fewer units – than the five-year pre-pandemic average.

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