UK car production falls 27.3% in January 2021

Figures from the SMMT reveal the sharpest first-month drop in more than a decade

UK car production fell 27.3% last month, making it the industry’s worst January output since 2009, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).

Just 86,052 vehicles were produced in the UK last month – 32,262 fewer than in January 2020, representing the most severe fall for over a decade.

Manufacturing for both the domestic market and for overseas markets fell heavily in the month. However, allegedly as a result of ongoing Brexit complications, it was exports that took the biggest hit, falling 29.1% to 69,360 units. Domestic production dropped by 18.3% to 16,692 units.

Shipments to the major EU, US and Asian markets were particularly badly hit, falling by 26.2%, 34.5% and 36.1%, respectively.

The SMMT cited a combination of global supply chain issues, difficulty adapting to new post-Brexit trading legislation and the ongoing effects of the pandemic - and related national lockdowns - as the main reasons for the drops.

Bucking the wider industry trend, production of electric (EV), plug-in hybrid (PHEV) and hybrid vehicles grew during the month as manufacturers continue to prepare for the UK government’s 2030 ban on the sale of new ICE vehicles.

Output of EVs, PHEVs and hybrids grew by 18.9% higher output in January 2021 compared with January 2020, with the result that more than one in four UK-built vehicles are now electrified (25.3%).

SMMT boss Mike Hawes said: “Yet another month of decline for UK car production is a grave concern, and next week’s budget is the chancellor’s opportunity to boost the industry by introducing measures that will support competitiveness, jobs and livelihoods.

“Whilst there have been some very welcome recent announcements, we need to secure our medium to long-term future by creating the conditions that will attract battery gigafactory investment and transform the supply chain.

"Most immediately, however, we must get our Covid-secure car showrooms back open, ideally before 12 April. This will be the fastest way to UK automotive manufacturing recovery.”

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