Recovery in car production 'massively challenged' by supply shortages

The recovery in car production is “massively challenged” by the current shortage of semi-conductors, according to SMMT CEO Mike Hawes.

Hawes was speaking as the SMMT announced that UK car production rose dramatically in May,

Today, Daksh Gupta, CEO of Marshall Motor Group also said that supply problems could hit the second half performance of the company.

“There remains a high level of uncertainty over the second half of 2021, and possibly longer, given the potentially significant impacts of new vehicle supply issues as a result of a well-documented worldwide shortage of semi-conductors.”

Some 54,962 cars rolled off production lines compared to just 5,314 a year ago, when coronavirus halted manufacturing.

Performance, however, is still far below pre-pandemic levels, down -52.6% on the same month in 2019.

So far this year UK factories have turned out 429,826 cars, down -22.9% on the same five-month period in 2019.

Hawes said, “May’s figures continue to look inflated when compared to last year’s near total standstill of production lines. The recovery of car production is, however, still massively challenged here and abroad by global supply shortages, particularly semiconductors.”

Jim Holder, editorial director, What Car?, said welcomed the increase in electric vehicle production and growing volumes but added:  “A more immediate concern for the industry remains the current microchip or semiconductor shortage that is impacting both vehicle supply and trim levels, which in return is affecting whether buyers opt for new or used models. Our own research of 1,149 in-market used buyers found 29% were originally in the new car market, but have switched to the used market in search for lower prices and better stock availability.

“The ongoing shortage has the potential to match Covid-19 for its disruption and intensity, as there is no quick or easy fix in sight and highlights the weaknesses of even the most robust global supply chains.”

The SMMT is to issue production forecasts in July.



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