The UK's car production experienced an 11.7% rise in the first half of 2023 as supply chain challenges continued to diminish, with June's output showing a growth of more than a quarter,
according to new data from the Society of Motor Manufacturers and Traders (SMMT). A total of 450,168 new cars were manufactured in British factories between January and June, compared to 403,131 during the same period in the previous year.
The surge in production during the initial six months of the year was predominantly driven by increased export demand, which rose by 13.6% year-on-year, amounting to 359,940 cars. This indicates that four out of five cars produced in the UK are sold overseas.
The SMMT emphasized that the fading supply chain issues, particularly related to semiconductors, have significantly contributed to the recent boost in productivity. Manufacturers are now better equipped to manage the global shortage of parts, which had previously hampered vehicle manufacturing during the pandemic.
June saw a particularly notable increase in outputs, rising by 16.2% year-on-year, marking five consecutive months of growth for British car makers.
Furthermore, the data showed an increasing number of hybrid electric, plug-in hybrid, and battery electric vehicles being manufactured in the UK. The combined volumes of these "electrified" cars surged by 71.6% in the first half of 2023, representing more than a third of all car production.
The announcement of Tata's plan to build a £4 billion battery gigafactory in the UK provided a significant boost to the British automotive industry. This development, along with the Nissan-Envision AESC gigafactory near the car plant in Sunderland, showcases the country's potential for producing greener vehicles for the future.
Despite the positive growth, the SMMT expressed caution, stating that annual outputs exceeding one million units remain unlikely for the next five years. The current full-year projection for 2023 stands at 860,000 cars, which would represent an 11% increase compared to the previous year, the worst year for UK car production since 1956.
SMMT's Chief Executive, Mike Hawes, emphasized the need to focus on competitiveness and strengthen the UK's automotive offering to sustain growth and attract further investments. He also noted that challenges from post-Brexit EU trade requirements on rules of origin for electric vehicles might impact the industry's competitiveness and called for a pragmatic solution. Photo by Thomas doerfer, Wikimedia commons.