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UK car production at lowest level in a generation

By / 5 months ago / Latest News / No Comments

UK car manufacturing output fell 29.3% in 2020 to 920,928 units, hitting the lowest total since 1984.

UK production of electric and hybrid vehicles fell far less than overall new car production in 2020 – reflecting growing demand for EVs

Production last year totalled 920,928 units, down some 382,000 units on 2019, according to the latest figures issued today by the Society of Motor Manufacturers and Traders (SMMT). The decline was the result of severe disruption to manufacturing operations throughout 2020, with lockdowns and social distancing measures restricting factory output, Brexit uncertainty continuing until Christmas Eve and depressed market demand in key export destinations.

Production for UK and overseas markets both declined 30.4% and 29.1% respectively. But exports continued to drive manufacturing; more than eight in 10 cars made last were exported. The EU remained the UK’s biggest export destination, taking a 53.5% share, despite volumes falling 30.8%.

One positive note however was in production of electric and hybrid vehicles. While the overall number of battery electric (BEV), plug-hybrid (PHEV) and hybrid vehicles (HEV) produced fell 10.1% from 192,304 units in 2019 to 172,857 in 2020, this was far less than the 29.3% overall production decline. As a result, their combined market share increased to make up 18.8% of all cars produced in the UK last year. This compares to 14.8% a year before and reflects the growing take-up of EVs . Within this, BEVs increased to a 4.5% share, up from 3.4%. And a total 79.6% of electric and hybrid vehicles produced in 2020 were exported.

New car production is expected to partially recover in 2021; the latest independent outlook forecasts that car output will reach one million units in 2021. But much depends on Covid recovery, market confidence and the impact of the new cross-channel rules.

Mike Hawes, SMMT chief executive, said: “These figures, the worst in a generation, reflect the devastating impact of the pandemic on UK automotive production, with Covid lockdowns depressing demand, shuttering plants and threatening lives and livelihoods. The industry faces 2021 with more optimism, however, with a vaccine being rolled out and clarity on how we trade with Europe, which remains by far our biggest market.

“The immediate challenge is to adapt to the new conditions, to overcome the additional customs burdens and regain our global competitiveness while delivering zero emission transport. We will continue to work with Government to attract investment in battery production and supply chain transformation as we transition to smart and sustainable mobility, supporting jobs and driving economic growth nationwide.”

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Natalie Middleton

Natalie has worked as a fleet journalist for nearly 20 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day.