Covid hits car factories as output falls to 65-year low

LAST year was the worst for Britain’s car factories since 1956 – as an industry chief warned soaring energy bills could spark higher prices.

Car Workers Inspecting Production Line

BRAKES ON: Pandemic hit work (Image: Getty Images)

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The Covid crisis caused a global parts shortage which dented production. The closure of Honda’s Swindon plant also had a significant impact.

The pandemic led to cars made by UK manufacturers – such as Nissan and Jaguar Land Rover – falling 6.7 per cent to 859,575 – the lowest total for 65 years, said the Society of Motor Manufacturers and Traders.

Chief executive Mike Hawes said: “It was a dismal year – there’s no hiding it.” One big obstacle was a shortage of semiconductor chips, more than 1,500 of which are used in the average new car.

They are also used in PCs and consumer electronics and when sales of those soared during the lockdowns, it harmed supplies to car manufacturers.

The Society revealed that the shortages were still being felt.

They are also used in PCs and consumer electronics and when sales of those soared during the lockdowns, it harmed supplies to car manufacturers.

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It also highlighted the impact of soaring energy costs, with power – after components and labour – being typically the largest bill for a car plant. Mr Hawes said: “Energy is a significant input cost and one where we have a competitive disadvantage.” New car prices rose last year and he warned higher energy costs could be a factor in further increases.

Amid the gloomy data, the production of electric cars jumped after growing demand.

A record 224,000 battery-electric, plug-in hybrid and hybrid electric vehicles were made in the UK last year – including the Nissan Leaf and BMWowned Mini – representing 26 per cent of all cars produced here.

It came as luxury motor maker Bentley announced its first pure electric vehicle will be built at its Crewe factory.The battery-powered car is scheduled to hit the roads in three years.

The Volkswagen-owned company has said it is investing £2.5billion in sustainability over the next 10 years.

And the Society insisted there were grounds for optimism after £4.9billion of investment announced in the industry last year – the highest since 2013.

• In an earlier version of this story, we incorrectly stated that the closure of Toyota’s plant in Swindon had a significant impact on UK car production. That should have said Honda. We apologise for the error.

William Murphy

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