The car industry in the United Kingdom is facing a difficult period, as new data shows that vehicle production in the country has dropped to the lowest level since 1956. According to the Society of Motor Manufacturers and Traders (SMMT), 775,014 cars were built in the UK during 2022, which is a 10% decrease from the 859,575 vehicles produced in 2021. The 2022 figure also represents a 40% decrease compared to the total for 2019, the last year before the impacts of COVID-19 and semiconductor shortages were felt.
The SMMT attributes the decline to a combination of factors, including the COVID-19 pandemic and the chip crisis, as well as decisions made by major car manufacturers. In April 2022, Stellantis decided to stop producing the Vauxhall Astra at the Ellesmere Port factory and instead focus on producing electric vans at the same site. This move followed Honda’s decision to close its factory in Swindon the previous year, which also had a major impact on the industry.
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However, there is some positive news for the UK car industry. The country produced more electrified vehicles than ever before in 2022, accounting for almost one third of all cars built. A total of 234,066 fully electric, hybrid and PHEV vehicles were built in the UK last year, a 4.5% increase from 2021.
Sky News reports that the reopening of the Chinese economy this year could lead to increased availability of chips and a 15% increase in UK vehicle production. However, some experts are concerned that investment might be redirected to the United States, where the Inflation Reduction Act grants EV tax credits to buyers of cars that are built in the U.S. and use locally sourced parts in their construction.
