UK car production plummets to lowest level since 1956 amid chip shortage, worker absences

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Luxury Jaguar XK and F-type automobiles, produced by Jaguar Land Rover Plc, a unit of Tata Motors Ltd., travel along the production line at the company’s assembly plant in Castle Bromwich, U.K.

Simon Dawson | Bloomberg | Getty Images

LONDON — U.K. car production plummeted to a new low last month, marking the worst July performance for the industry since 1956, according to a trade group.

The Society of Motor Manufacturers and Traders said Thursday that U.K. manufacturers built just 53,438 vehicles in July, marking a 37.6% drop on July 2020.

A global semiconductor shortage, factory shutdowns and worker absences amid the ongoing coronavirus pandemic all contributed to the decline, SMMT said.

While July was a particularly bad month, car production across U.K. factories is up 18.3% year-to-date compared to 2020, when Covid restrictions meant people couldn’t go to work.

Some 552,361 cars have been built in the U.K. since January, but that’s still 28.7% down on 2019 pre-pandemic levels.

Mike Hawes, SMMT Chief Executive, said in a statement that the figures “lay bare the extremely tough conditions UK car manufacturers continue to face.”

“While the impact of the ‘pingdemic’ will lessen as self-isolation rules change, the worldwide shortage of semiconductors shows little sign of abating,” Hawes said.

The so-called “pingdemic” referred to people receiving notifications on their phones telling them to self-isolate for several days if they came into contact with someone who tested positive for Covid-19.

Why is the car industry suffering?

Harald Kroeger, a member of the Bosch management board, said Monday that supply chains have buckled in the last year as demand for chips in everything from cars to PlayStation 5s and electric toothbrushes has surged worldwide.

The car industry is a crucial cog in the U.K. economy, generating over £78.9 billion ($108.4 billion) a year. Approximately 180,000 people work in manufacturing while 864,000 are employed in the wider supply chain.

Roughly 30 manufacturers are building 70 car models in the U.K. at present. That includes local firms such as Jaguar Land Rover, Vauxhall and Rolls-Royce, as well as international firms like Ford and Nissan.

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