Automotive manufacturing within the UK stalled dramatically final yr. The pinnacle of the trade commerce physique described the state of affairs because the “hardest in many years”, and the numbers definitely back up his claim.

The newest automobile registration figures present that 2021 was up just 1% on a COVID-ravaged 2020 – and manufacturing truly went into reverse gear.

In November 2021, UK automobile manufacturing dropped by almost 29%, the fifth consecutive month of output falling, and the worst because the mid-Eighties. October’s figures had been the worst since the 1950s.

Total, automobile making as much as November 2021 was 6.2% under that of 2020, with 797,261 automobiles made – worse even than a yr through which UK manufacturing was so badly affected by manufacturing unit stoppages brought on by the primary lockdowns.

This issues not just for the 180,000 people employed instantly in auto manufacturing or the 864,000 jobs throughout the broader automotive trade. The trade accounts for 13% of complete UK export of products, price £44 billion, and invests £3 billion every year into automotive analysis and improvement.

Neither is this simply a problem for the UK. The worldwide microchip shortage had a serious affect in 2021, and will price the worldwide auto trade as a lot as US$210 billion (£155 billion) in lost sales in 2022, with output curtailed by virtually 8 million automobiles.

Of the automobiles that had been made within the UK, over 80% had been as a consequence of be exported, with most of these (some 60%) sure for the EU. Asia accounted for 15.6% of UK automobile exports, the US 13.4% and Australia 1.2% (that new trade deal with Australia is welcome however received’t actually enhance UK automobile exports a lot). Total, exports to the EU fell by 29% in comparison with the identical interval in 2020, with extra dramatic falls additional afield, down by 57% to Japan and by 67% to the US.

Now the chief govt of the Society of Motor Producers and Merchants, Mike Hawes, has known as for extra support for the industry. He additionally flagged up dangers round new customs preparations between the UK and EU that come into impact from January 1 2022.

He stated: “With an more and more detrimental financial backdrop, rising inflation and Covid resurgent house and overseas, the circumstances are the hardest in many years.

“With output massively down for the previous 5 months and prone to proceed, sustaining cashflow, particularly within the provide chain, is of significant significance. We’ve to look to authorities to offer assist measures in the identical means it’s recognising different COVID-impacted sectors.”

A smoother journey

Wanting forward, a new production outlook report forecasts that UK automobile and van manufacturing may edge above a million in 2022, and even attain 1.2 million in 2024. Again in 2016, the UK produced 1.7 million a yr. However that now appears a really very long time in the past, with output broken ever since by a mix of world markets, Brexit uncertainty, and COVID-related provide chain points.

Long term, the auto trade has to take care of probably the most pronounced change in its historical past, with a speedy shift now underway in the direction of battery powered electrical automobiles. The UK authorities has set a 2030 deadline to part out the sale of petrol and diesel automobiles, however insurance policies to really get there appear half-hearted.

Progress shouldn’t be helped for instance, by the slow speed of charging infrastructure roll out, or the large lower in subsidies out there for brand spanking new battery electrical automobiles which suggests many don’t qualify for support.

On a optimistic notice, British manufacturing of battery electrical automobiles and hybrid automobiles (with a combustion engine and a battery) took a record share of manufacturing in 2021, accounting for round a 3rd of all automobiles made in November, and greater than 1 / 4 (26%) over the yr.

Of these, battery electrical automobile output was up in November by 53% to 10,359 models, hitting a brand new excessive of virtually 14% of manufacturing, greater than double the extent a yr in the past. UK-based automobile makers like Nissan, MINI and the London Electrical Car Firm produced greater than 60,000 zero emission automobiles in 2021.

However UK battery manufacturing is lagging behind main funding throughout the EU, which is aiming to be unbiased in battery manufacturing by 2026, and has introduced collectively seven international locations to kind the European Battery Alliance. And whereas there’s confirmed funding in only one battery “gigafactory” within the UK, there are no less than 15 beneath building in international locations together with Sweden, France, Germany, Hungary and Poland.

Funding in battery manufacturing within the UK will must be accelerated dramatically given the shift to electrical automobiles now underway. Past that, better and more joined-up assist for the auto trade might be wanted to get to 2030 with a viable mass UK auto trade intact.