Saturday, 18 September, 2021

UK car production drops to lowest July level in 65 yrs

UK car production drops to lowest July level in 65 yrs

LONDON: UK car production plunged to its lowest July level since 1956 as the global microchip shortage hit the industry.

Only 53,438 cars were built over the month, a drop of 37.6 per cent on July last year, the Society of Motor Manufacturers and Traders said. Supply chain challenges have hampered production and carmakers have struggled with a wave of workers being “pinged” by the National Health Service Covid-19 tracing app, report agencies.

SMMT chief executive Mike Hawes said the July numbers “laid bare the extremely tough conditions UK car manufacturers continue to face”.

“While the pingdemic will lessen as self-isolation rules change, the worldwide shortage of semiconductors shows little sign of abating,” he said. Although car production for the year to date is almost one fifth higher at 552,361 than in 2020, it remains 28.7 per cent down on pre-pandemic levels in 2019 when 774,760 cars rolled off the production line. The chip shortage has slowed car assembly lines across the globe because new vehicles often include dozens of microchips, also known as semiconductors.

The dearth is not only putting pressure on carmakers but also on tech companies and the consumer electronics sector, which are also competing for supply.

Up to $20 billion could be wiped off global carmakers’ operating profits in 2021 because of the chip shortage, Goldman Sachs said.

Carmakers across the globe are suffering. The supply-chain challenges cut short a run of positive profits for Jaguar Land Rover owner Tata Motors, which posted a bigger than expected net loss for the quarter that ended in June after warning last month that deliveries in the current quarter would be about 50 per cent lower than planned.