A global semiconductor shortage continues to dominate the headlines, as companies are struggling to deal with this issue. In July, U.K. manufacturers built just 53,438 vehicles according to the Society of Motor Manufacturers and Traders (SMMT). Car production in the U.K. fell to a new low last month, marking the worst July performance for the car industry since 1956.
Several factors affected companies in July. The first issue is a global semiconductor shortage, so now let’s move to issues. Factory shutdowns, as well as worker absences amid the ongoing coronavirus pandemic, also affected carmakers.
While July was a difficult month, car production across the factories is up 18.3% year-to-date compared to 2020. More than half a million cars left the factories in the U.K. since January. Nonetheless, that’s still 28.7% down on 2019 pre-pandemic levels.
Car production and chips
It is no secret that modern vehicles have dozens of microchips in them to control various functions. The country is making more electric cars, which require even more chips, than ever before. The Society of Motor Manufacturers and Traders revealed interesting details about electric cars. According to SMMT, approximately 26% of the cars built by U.K. manufacturers in July were either battery-electric, plug-in hybrid, or hybrid electric. It also said U.K. car factories turned out 126,757 of these products since the start of 2021.
It won’t be easy to boost car production in the country and around the world. Several automakers canceled semiconductor orders at the start of the Covid-19 pandemic. It is hard to blame them, as they expected that fewer people would order cars. But the situation changed dramatically, as more and more people are willing to buy cars. Currently, automakers are struggling to deliver cars due to a lack of chips.
Three world-famous carmakers Volkswagen, Toyota, and Volvo are trying to adapt to the ever-changing environment. All three of them announced this week that they will have to reduce production further if there is not an urgent solution to the chip crisis.
The car industry is an integral part of the country’s economy. In 2020, the car industry generated more than $108 billion. As of 2021, roughly 30 manufacturers are building 70 car models in the U.K. Dozens of companies provide jobs to the tens of thousands of employees across the country.