UK car production rose six per cent in the first three months of 2023 thanks to the easing of semiconductor shortages, though concerns remain as production continues to lag pre-pandemic levels.
According to figures from the Society of Motor Manufacturers and Traders (SMMT), production rose to 219,887 units, with factories producing 12,540 units more than in the same quarter last year.
March saw a second consecutive month of growth for car production, with volumes up 6.1 per cent.
The export market continued to drive growth, representing eight out of ten cars made, the SMMT said. The EU, Britain’s largest trading partner, received the largest share of car shipments at 63.6 per cent.
Mike Hawes, SMMT chief executive, said: “A second consecutive month of growth for UK car production gives cause for optimism, though volumes are still well below pre-pandemic levels.”
The results come as the easing of the global semiconductor shortage accelerates, with JP Morgan predicting this month that the issues were “all but over” and even anticipating an oversupply in the months to come.
The report also noted a significant rise in EV vehicle production, up by 75 per cent in March, with four in ten cars built during the month featuring ultra-low or zero emission powertrain technology.
Hawes added that “vigorously promoting Britain globally to secure the investments essential to a zero carbon automotive future” would be essential to staying competitive in the global market.
Demand for EV and hybrid cars rising
Richard Peberdy, UK head of automotive at KPMG, said: “Driven by increased demand for hybrid and electric vehicles, and a gradual easing of component shortages that have impacted recent years, UK car production saw pleasing growth in the first quarter of 2023. But despite this upturn in production, overall volumes of vehicles produced remains lower than before the pandemic.
“Whilst it’s good news that production levels are again increasing, big questions still remain unanswered about how the UK will produce electric vehicles at much larger scale and what the nation’s strategy is to ensure that its car industry can compete with countries who have already developed bold policy moves to encourage inward investment in next generation manufacturing facilities.”
Hugo Griffiths, consumer editor at Carwow said: “It can be easy to forget how significant a number of cars are built here each month, but March’s 6.1 per cent upswing is a good reminder of this. With over 80,000 new Nissan Qashqais, Toyota Corollas, MINIs, Range Rovers and other popular nameplates manufactured here, last month UK plants produced a little under half the number of cars Germany, Europe’s automotive powerhouse, has made each month so far this year.
“We’re some way off the heady 271,000 cars we built way back in March 2017, but with every other car made here being exported to EU markets, we’ve ridden out most of the waves recent years have thrown at us. With fresh commitments from JLR and rising output levels across the industry, UK automotive remains in optimistically rude health.”
Earlier this week, separate SMMT analysis revealed that more than a million electric cars are now in use in the UK.