UK Car Production Fell to 65-Year Low in 2021: COVID-19 Pandemic and Chip Shortage to Blame

Car production in the United Kingdom fell last year to its lowest level since 1956, the country's Society of Motor Manufacturers and Traders (SMMT) announced this week. Only 859,575 cars were made in Great Britain in 2021, a 6.7 percent drop compared to its 2020 numbers.

SMMT blamed the computer chip shortage and supply chain issues as the reasons behind the UK auto industry's poor performance last year. The trade group said, "The shortage of semiconductors, a critical component in modern car manufacturing, was the principal cause of the decline, with factories having to reduce or even pause production while awaiting parts whose supply has been heavily constrained by the global pandemic."

Indeed, the UK's car output in 2021 was 34 percent below pre-pandemic levels in 2019 when over 1.3 million vehicles rolled off production lines. COVID-19 continued to wreak havoc on UK's auto industry last year, with staff shortages hitting car manufacturers due to the Alpha, Delta, and Omicron variants. Lockdowns brought upon by the pandemic also forced some car showrooms to close for months.

Closure of Honda plant deals a huge blow to UK car industry

Non-coronavirus issues also contributed to the decline in production, with a major UK auto plant closure in July accounting for around a quarter of the annual drop. Honda closed its car plant in Swindon, England, dealing a huge blow to Britain's auto industry.

Honda's Swindon plant accounted for about 10 percent of the total British car production before the pandemic started. The automaker attributed the closure of the facility to lower car sales across Europe and not because of Brexit.

More than 80 percent of the cars produced in Britain are exported, with the European Union getting most of those exports. New trade barriers brought upon by Brexit have given car manufacturers major concern as they rely on the swift delivery of components and finished vehicles across the border.

Related Article: Nissan Starts 2022 With Recall: More Than 793,000 Nissan Rogue SUVs in the US and Canada Affected

Electric vehicles provide a silver lining for the UK auto industry

SMMT still found some positives with the UK car industry last year, particularly with its production of electric vehicles. British car factories produced a record number of hybrid electric (HEV), plug-in hybrid (PHEV), and battery electric vehicles (BEV) last year, turning out 224,011 units of these zero and ultra-low emission vehicles. That accounts for 26.1 percent of all cars made in the UK last year.

According to SMMT chief executive Mike Hawes, 2021 was one of the worst years for the UK car industry since World War II. Hawes added that optimism remains within Britain's embattled auto industry thanks in large part to the TCA deal. Investments have been unleashed since that trade deal was agreed with the EU at the end of 2020.

Jaguar Land Rover was the UK's biggest carmaker in 2021, with 220,554 units. Nissan came in second with 204,522 vehicles, followed by BMW's Mini with 186,762 cars.

READ MORE ON AWN:

Panasonic to Mass Produce Tesla 4680 Battery Cells By 2023; Will Reportedly Invest $700 Million 

Tesla vs General Motors: GM Plans To Beat Elon Musk's Electric Vehicle With 1 Million EVs by 2025