Car production increases 10% in April as supply shortages ease

Auto production was up 10 percent year-on-year in April, another strong sign that shortages of parts such as semiconductors are easing, according to the latest industry figures.

A total of 66,527 engines rolled off factory assembly lines last month, an increase of nearly 6,000 from April 2022, the Society of Motor Manufacturers and Traders (SMMT) confirmed Thursday.

Exports drove the increase in production, while ‘electrified’ cars now account for a third of all engines produced in the UK.

Demand from overseas markets rose 14.7 percent in April, with 54,820 of all vehicles built destined for foreign markets.

It means that four in five (80.1 percent) of all British-built motorcycles would be shipped abroad.

The European Union remained the most important global market, accounting for nearly three in five (58 percent) of all engine exports, followed by the US, China and Australia, the figures show.

Although production outputs are rising, they are still far behind pre-pandemic volumes

A total of 66,527 engines came off factory assembly lines last month, an increase of nearly 6,000 from April 2022, the SMMT confirmed Thursday

Four in five cars leaving factory assembly lines last month are destined for export as overseas demand continues to boost UK car production

The latest figures point to a reduction in the shortage of components – especially computer chips – which has stifled production since the pandemic and pushed new car production in the UK to post-war lows.

The number of cars being made is contributing to an increase in demand for electrified vehicles – the combination of conventional hybrids, plug-in hybrids and all-electric models.

Production of these greener vehicles was 56.2 percent higher than in the same month a year ago and represented more than a third (37.7 percent) of all output in April.

More than a third of new cars built in UK factories last month were ‘electrified’ – hybrid or battery electric models. Pictured: a Nissan Leaf EV coming off the assembly line in Sunderland

So far this year, manufacturers have made 113,315 electrified vehicles, which the SMMT says is ‘a testament to the UK’s growing ability to produce the next generation of green passenger cars’.

The news follows reports yesterday that JLR owners Tata are set to invest billions in a new EV battery factory in Somerset, which will not only create 9,000 jobs in the area, but will also be a huge boost to the UK’s car industry.

The Tata boss is expected to fly to London next week to finalize the deal to build the South West battery factory.

Such an investment would also boost the UK car industry, days after major automakers including Vauxhall owner Stellantis and Ford warned that looming post-Brexit trade rules would make them unfeasible.

Britain has fallen behind in the global race to build up local battery capacity, threatening the future of its electric vehicle sector, which requires heavy duty batteries to be built close to car factories.

Location: Jaguar Land Rover is expected to choose a site near Bridgwater in Somerset (pictured) for its new car battery gigafactory

Mike Hawes, CEO of the motor trade organisation, said: ‘Car production in the UK is starting to pick up again, good news for the sector and the many thousands of jobs and livelihoods it sustains.

“These figures also show how exports, particularly to Europe, continue to form the basis of UK car production, so we must do everything we can to ensure the competitiveness of these trade relationships.

“This means immediately addressing the rules of origin challenge faced by manufacturers on both sides of the Channel, or we risk the application of tariffs – and therefore unnecessary costs – to the vehicles we try to encourage consumers to buy .’

Commenting on the production figures, Richard Peberdy, head of automotive for KPMG in the UK, added: “The car industry in the UK and Europe is increasingly concerned about changes to rules of origin as 2024 begins.

“The need for a higher percentage of an electric vehicle sourced from the UK or the EU is a major challenge, especially as battery production within Europe is still in its infancy.

“More than half of vehicles produced in the UK in April were electric in some form, so the importance of a solution that avoids tariffs being applied to vehicles is clear.”

A spokesman for the Department for Business and Trade said: ‘It’s great to see our automotive sector ramp up, selling more cars to the world and supporting thousands of vital jobs back home.

“We are working on ambitious plans for the future of our automotive industry and are committed to maintaining competitive trade relationships to continue to boost exports and secure valuable investment.”