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UK car production falls to lowest level since 1956 amid chip shortage

Luxury Jaguar XK and F-type cars, produced by Jaguar Land Rover Plc, a unit of Tata Motors Ltd., journey alongside the production line on the company’s meeting plant in Castle Bromwich, U.Okay.

Simon Dawson | Bloomberg | Getty Images

LONDON — U.Okay. car production plummeted to a brand new low final month, marking the worst July efficiency for the trade since 1956, in accordance to a commerce group.

The Society of Motor Manufacturers and Traders said Thursday that U.Okay. producers constructed simply 53,438 automobiles in July, marking a 37.6% drop on July 2020.

A world semiconductor shortage, manufacturing unit shutdowns and employee absences amid the continued coronavirus pandemic all contributed to the decline, SMMT stated.

While July was a very unhealthy month, car production throughout U.Okay. factories is up 18.3% year-to-date in contrast to 2020, when Covid restrictions meant individuals could not go to work.

Some 552,361 automobiles have been constructed within the U.Okay. since January, however that is nonetheless 28.7% down on 2019 pre-pandemic ranges.

Mike Hawes, SMMT Chief Executive, stated in a press release that the figures “lay bare the extremely tough conditions UK car manufacturers continue to face.”

“While the impact of the ‘pingdemic’ will lessen as self-isolation rules change, the worldwide shortage of semiconductors shows little sign of abating,” Hawes stated.

The so-called “pingdemic” referred to individuals receiving notifications on their telephones telling them to self-isolate for a number of days in the event that they got here into contact with somebody who examined constructive for Covid-19.

Why is the car trade struggling?

New automobiles have dozens of microchips in them to management all the pieces from energy steering and car stereos to acceleration and electrical home windows.

The U.Okay. is making extra electrical automobiles, which have considerably extra chips in them, than ever earlier than.

Approximately 26% of the automobiles constructed by U.Okay. producers in July had been both battery electrical, plug in hybrid, or hybrid electrical, SMMT stated, including that this can be a new file. It stated U.Okay. car factories have turned out 126,757 of those merchandise since the beginning of the year.

Several car producers cancelled semiconductor orders at the beginning of the pandemic as a result of they had been involved a couple of drop in gross sales. But when gross sales recovered quicker than anticipated, the car giants discovered themselves on the finish of the road for chips.

Sweden’s Volvo, Germany’s Volkswagen and Japan’s Toyota all introduced this week that they are going to have to scale back production additional if there may be not an pressing answer to the chip disaster.

German know-how and engineering group Bosch, which is the world’s largest car-parts provider, instructed CNBC this week that semiconductor provide chains within the automotive trade are not match for function.

Harald Kroeger, a member of the Bosch administration board, stated Monday that offer chains have buckled within the final year as demand for chips in all the pieces from automobiles to PlayStation 5s and electrical toothbrushes has surged worldwide.

The car trade is a vital cog within the U.Okay. economic system, producing over £78.9 billion ($108.4 billion) a year. Approximately 180,000 individuals work in manufacturing whereas 864,000 are employed within the wider provide chain.

Roughly 30 producers are constructing 70 car fashions within the U.Okay. at current. That consists of native companies reminiscent of Jaguar Land Rover, Vauxhall and Rolls-Royce, in addition to worldwide companies like Ford and Nissan.

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