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UK car production rises for third month in a row

25 August 2022
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2 min.
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UK car production rises for third month in a row

Cars from the UK

Vehicle production in the United Kingdom rose for the third month in a row, rising 8.6% year-on-year to 58,043 units in July. This was shown by figures released on Thursday by Britain's The Society of Motor Manufacturers and Traders Ltd (SMMT).

Production of cars for the domestic market grew by 40.7% and exports by 2.8%. With that, the production of electric and hybrid vehicles continues to grow. In July, their share made 29.9% of all produced vehicles.

Exports to the EU and USA fell by 7.3% and 22.3% respectively in July, although orders from Asia increased by 54.0% from China and 40.1% from Japan.

According to the SMMT, exports are crucial to the UK automotive industry, with 78.8% of cars built here since January being shipped overseas and 59.3% to the EU.

The organisation's experts point out that current production figures are still significantly below those of 2019, when the UK economy had not yet experienced the effects of the coronavirus pandemic. Compared to July 2019, car output is down 46.4%. "While the statistics show some reduction in the severity of component shortages, the industry is still far from a full recovery," SMMT experts point out.

Also, Richard Peberdy, Head of UK Automotive at KPMG commented on the situation. He agreed with SMMT's reasons for the decline, stating: "Rising energy, supply and labour costs are increasing the cost of producing cars at a time when many consumers are slowing down their spending."

Nevertheless, production of battery electric vehicles was up 65.9%, probably because buyers are looking for cheaper cars to run, but also because of increased demand from company fleets In fact, 29.9% of all cars manufactured in the UK in July 2022 were hybrid, plug-in hybrid or all-electric, for a total of 17,356 vehicles.

Experts cite difficulties with the supply of components, especially semiconductors, as well as rising energy prices as the main reasons making it difficult to increase output.

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Head of UK Automotive at KPMG
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