The UK automotive industry has downgraded its production forecast for the year as global chip shortages and the war in Ukraine’s impact continue to bite.
The Society of Motor Manufacturers and Traders (SMMT) told journalists today production will grow by 1 per cent.
This means that 866,000 cars will be built by the end of the year – 9.5 per cent below the 976,285 cars forecast in March.
“The impact over the last three or four months was more severe than it had been anticipated and that has impacted the forecast for the overall year,” said SMMT’s chief executive Mike Hawes.
According to Hawes, semiconductor shortages are not the only issue as manufacturers face rising raw material costs and rising logistics prices.
Energy prices, already 59 per cent higher compared to the EU average, exacerbated “an already anti competitive position that we’re in.”
The remarks come as car production levels fell 19.2 per cent in the first six months of the year.
SMMT figures reported that 95,792 fewer vehicles were manufactured, even though a 5.6 per cent uplift in June – the second consecutive month of growth – was cause for optimism.
Despite the decrease, investment in the UK automotive sector has never been higher, as the industry moves towards electrification.
More than £3.4bn were announced since the beginning of the year, while the average per year amounted to around £3bn.
“Medium to long-term we need to make sure that we retain competitiveness and continue to attract that investment as investments made globally are on a scale never been foreseen,” he added.
“We need to make sure that the UK, which was internationally renowned for internal combustion engines, has that same reputation for electric vehicles.