UK car production remained over 40% down on pre-COVID 2019 in Q1

The UK’s car manufacturing sector remained “well below pre-pandemic levels” during Q1 2023, despite a 6% increase in production volumes over the three-month period.

Production volumes were up 6.1% in March, to 81,605, units as a 10.4% increase in exports (to 61,586) offset a 5.1% decline in demand from domestic customers, the Society of Motor Manufacturers and Traders (SMMT) revealed this morning.

The result left Q1’s volumes up 6% at 219,887 units, which is 40.6% down on a Q1 2019 result which represented a 15.9% year-on-year decline at the time.

SMMT chief executive Mike Hawes called for UK Government action to support a sector faced with pressure from overseas.

“A second consecutive month of growth for UK car production gives cause for optimism, though volumes are still well below pre-pandemic levels,” said Hawes.

“If British car manufacturing is to get back towards those levels, with all the economic benefits that brings, we need to match the best in global competitiveness.

“That means driving down the high cost of UK energy, reforming business rates and vigorously promoting Britain globally to secure the investments essential to a zero carbon automotive future.”

The SMMT said that an easing of the global shortage of semiconductors and other components had resulted in Q1’s 12,540 unit uplift in production, with exports increasing 6.6% across the three months – representing almost eight-in-10 cars made.

In March, the EU took the largest share of exported cars, accounting for 63.6% of exports (39,172 units), as shipments rose 4.9%, while those to the next biggest markets, the US and China declined by 4.1% and 8.3%.

The production of alternative fuel vehicles (AFVs) surged by 75% in March to 32,546 units, with four-in-10 cars featuring ultra-low or zero emission powertrain technology, the SMMT said.

More than 20 models of electric cars, vans, buses, trucks and taxis expected to be in production in the UK by 2025, it added.

Commenting on today’s (April 28) car production data, KPMG UK head of automotive Richard Peberdy said: “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: “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.”