Output from UK car plants soared 13.1% in February, signposting “the road to recovery” as supply chain shortages start to ease.

UK car production levels were up 13.1% in February

A total of 69,707 cars rolled off factory lines last month – up by 8,050 units, according to the new figures from the Society of Motor Manufacturers and Traders (SMMT).

Volumes rose for both home and overseas markets, up 20.3% and 11.5% respectively. But it was exports that continued to account for the lion’s share of production. A total of 56,634 cars were produced to fulfil global orders, up from 50,786 a year before and representing 81.2% of output. The majority of these exports (59.6%) will head into the EU, as the UK’s largest trading partner.

Growth was supported by a gradual return to normality after the chain shortages – notably of semiconductors.

Output of hybrid, plug-in hybrid and battery electric vehicles particularly surged, up 72.2% from 15,905 to a total of 27,392 units and accounting for two in five (39.3%) cars produced in the month.

But the SMMT said production of these vehicles needs to accelerate further and a new survey of its members finds nine in 10 firms want measures to deliver low-cost, low-carbon energy to help support transition to zero-emission technologies.

While automotive businesses are broadly optimistic about the next 12 months, more than eight in 10 report that input and employment costs have risen in the past three months, so action to alleviate ‘cripplingly high and uncompetitive energy costs’ ranks as their number one concern. Support on business rates, easing supply shortages and access to trade are also all viewed as beneficial for growth.

Mike Hawes, chief executive, said: “February’s growth in UK car production signposts an industry on the road to recovery. The fundamentals of the sector are strong; a highly skilled workforce, engineering excellence, a sector that is embracing new electrified vehicle manufacturing and wide-ranging capabilities in the EV supply chain. To take advantage of global opportunities, however, we must scale up at pace and make the UK the most attractive destination for automotive investment by addressing trading and fiscal costs and delivering low carbon, affordable energy.”

A report published by the SMMT in March has called for government backing to help the UK become an electric vehicle production leader; its Race to Zero: Powering Up Britain’s EV Supply Chain document provides a blueprint for how the UK can boost its electric vehicle manufacturing in the face of fierce global competition.

Close Brothers Motor Finance said the latest production figures showed that the industry was on the road to recovery.

Lisa Watson, director of sales, added: “As production recovers, the market seems to be taking a new shape. Manufacturers are focusing more on higher-specification models in order to drive profit margins, with fewer available cars under £25k, and many more priced £50k and higher. This is a gamble from manufacturers that demand is consistent; we will see in the registration figures whether it pays off despite the ongoing cost-of-living crisis.”