Last year, the number of new cars produced in the UK dropped precipitously once more, reaching its lowest level since 1956. The decrease is a 10% decline from 2021, which was already a historic low.
Production lines were impacted by a persistent global scarcity of semiconductor chips, according to the industry group the Society of Motor Manufacturers and Traders.
However, the UK’s lack of a strategy to make the nation an attractive location for manufacturing investment worries the industry.
The nation will continue to be a top site for vehicle manufacture globally, the government declared.
The UK produced 775,014 automobiles last year, according to the SMMT. Before the Covid epidemic in 2019, the UK had produced 1.3 million cars.
The industry anticipates reaching a million vehicles once more in 2025, but returning to pre-pandemic levels would require significant investment and the arrival of new automakers in the UK.
An electric vehicle battery company is put into administration
Despite a 30-year slump in car sales, demand for electric vehicles is on the rise.
Businesses are concerned that the UK is lagging behind the US and the EU in providing governmental assistance to manufacturers.
The Inflation Reduction Act, an important piece of US legislation, will provide billions in subsidies to automakers who establish supply chains for electric vehicles in the US.
This will “hoover up,” as SMMT CEO Mike Hawes put it, a lot of foreign investment.
An enraged EU is contemplating retaliation by either expressly loosening state assistance regulations or doing so while disguising the action as an extension of Covid recovery or green technology-boosting programs.
The freedom from the EU state aid regulations’ shackles, which restricted the amount of help that governments could provide to preferred businesses, was one of the positives of Brexit.
Mr. Hawes acknowledged that the UK might find itself in the unpleasant position of supporting important industries less than we did before our exit from the EU.
He stated that the UK required “something that demonstrates that the UK is open for business and open for these investments.
The SMMT claimed that the production estimates were impacted by both the July 2021 closure of Honda’s Swindon factory and the fact that Vauxhall Astros haven’t been produced there since April 2022.
The data, according to Mr. Hawes, showed how “difficult” 2022 would be for the UK auto industry, despite the fact that the nation would still produce more electric vehicles than ever before.
It is “self-evident that this sector can bring economic growth by developing more of these zero-emission models, but we must act now,” he said.
He told that the UK had “a few years” to take action because the global auto sector had already started investing in electric cars and batteries.
Mr. Hawes stated, “We need to be proactive in ensuring we have a variety of policies that attract investment.
He demanded a plan to hasten the transition to electric vehicles and the production of batteries, noting that the UK was well-positioned to succeed given its highly qualified workforce and engineering know-how.
According to the SMMT’s statistics, a record number of electric vehicles were produced in the UK last year, accounting for almost a third of all vehicles.
According to the trade association, only exports of these cars would be worth £10 billion.
The bankruptcy of battery start-up Britishvolt last week caused the UK automobile industry to suffer further setbacks.
The company had intended to construct a sizable facility to produce electric car batteries in Cambois, a town close to Blyth in Northumberland, however, funding for the project ran out.
While 35 plants are slated or are now under development in the EU, the UK currently only has one battery plant owned by China, located near the Nissan factory in Sunderland.
“We are keen to make sure the UK stays one of the greatest sites in the world for car manufacture,” a government spokesperson said.
“The £1 billion investment in Sunderland in 2021 is evidence of our success, and we are expanding on this with a big investment program to electrify our supply chain and generate jobs,” the company said.