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UK faces lowest October car output since 1956 amid chip shortage

British car output fell by an annual 41.4% last month to its lowest October level since 1956 as the global lack of semiconductor chips and a plant closure hit the sector, according to a trade industry body. A total of 64,729 cars rolled off British production lines, data from the Society of Motor Manufacturers and Traders (SMMT) showed on Friday

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UK car output fell by an annual 41.4% last month to its lowest October level since 1956 as the global lack of semiconductor chips and a plant closure hit the sector, according to a trade industry body.

A total of 64,729 cars rolled off British production lines, data from the Society of Motor Manufacturers and Traders (SMMT) showed on Friday.

Why is there a decrease in output levels?

The fall reflected the global supply chain problems and Honda’s permanent closure of its factory in late July.

Full-year car and van output will be below 1 million for a second consecutive year but is expected to return to above that level in 2022, the SMMT said, citing an independent forecast by AutoAnalysis.

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“Britain’s automotive sector is resilient but with COVID resurgent across some of our largest markets and global supply chains stretched and even breaking, the immediate challenges in keeping the industry operational are immense,” said

New car production in the UK dropped by 37.6% in July 2021 because of issues caused by the ‘pingdemic’, summer factory shutdowns and the global semiconductor shortage.

A total of 53,438 cars were built in July, with 8238 produced for the UK market and 45,205 shipped overseas, according to figures released by the Society of Motor Manufacturers and Traders (SMMT).

The figures represent a decline of 38.7% for the UK market and a decline of 37.4% for cars exported out of the country, which the SMMT says is the worst July performance since 1956.

Read more: Toyota, Suzuki post record sales in July

Exports accounted for 84% of all vehicles built in July. 

Year-on-year production remains up by 18.3% at 552,361 one year on from the height of the pandemic, but this figure is still 28.7% behind 2019’s pre-Covid-19 levels, when 774,760 cars rolled off production lines.

Electric, hybrid and plug-in models achieved a record market share of 26%, with the UK producing 126,757 examples since the start of 2021.

“These figures lay bare the extremely tough conditions UK car manufacturers continue to face,” said SMMT chief executive Mike Hawes. “While the impact of the ‘pingdemic’ will lessen as self-isolation rules change, the worldwide shortage of semiconductors shows little sign of abating.

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“The UK automotive industry is doing what it can to keep production lines going, testament to the adaptability of its workforce and manufacturing processes.

“Government can help by continuing the supportive Covid measures currently in place and boosting our competitiveness with a reduction in energy levies and business rates for a sector that’s strategically important in delivering net zero [emissions].”

Reuters with additional input by GVS 

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