British car production in October lowest since 1956

The decline reflected the global supply chain problems and Honda's permanent closure of its factory in late July

Production of new cars in the UK dropped by an annual 41.4 per cent last month to its lowest October level in 65 years as the global lack of semiconductor chips and a plant closure hit the sector, according to the latest report from the trade industry body.

A total of 64,729 cars rolled off British production lines, data from the Society of Motor Manufacturers and Traders (SMMT) showed on Friday.

The decline reflected the global supply chain problems and Honda's permanent closure of its factory in late July and is the lowest October UK output since 1956.

Car output in the first 10 months of the year stood at 721,505 vehicles, down 2.9 per cent on 2020 when sites were closed for months as the coronavirus pandemic hit Britain.

Full-year car and van output will be below one million for a second consecutive year but is expected to return to above that level in 2022, the SMMT said, citing an independent forecast by AutoAnalysis.

While total outputs were down, production of electrified cars remained healthy.

Battery electric vehicles (BEVs), plug-in hybrids (PHEV) and hybrids (HEV) made up nearly one in three (30 per cent) vehicles that came off UK assembly lines in October.

The month saw zero-emission model outputs surpass 50,000 for 2021 - more than the 43,790 pure-electric vehicles produced pre-pandemic in the full year of 2019, as manufacturing of EVs rose by 17.5 per cent to 8,454 units.

Commenting on the manufacturing figures released this morning, SMMT chief executive Mike Hawes described the figures as 'extremely worrying' and said they '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, he added.

Richard Peberdy, UK head of automotive at KPMG, said the short supply of semiconductor chips means carmakers are ‘having to prioritise models and markets’ and warned that this is likely to continue into 2022.

Increasing inflationary pressures only add to this challenging picture, leading to revised forecasts, he explained.

He said: But whilst there are fewer cars leaving the factory, those that do are selling, quickly, and with less discounting than historically required.