First increase in car production after 18 months of decline, figures show

The number of cars built in the UK has increased for the first time after 18 months of decline, figures show.

The Society of Motor Manufacturers and Traders (SMMT) said the figures were a “major step in the right direction” but added that with factories shut for much of March 2020, output was always going to be up.

The trade body reported that 115,498 cars were built in March, 46% more than the same month a year ago.

The figures were published a year since the coronavirus crisis caused all UK automotive plants to close in mid-March 2020, after only 78,767 cars had left factory gates that month.

Compared with the five-year March average, production was down by just over a fifth last month.

March production for the domestic market increased by 19.4% to 20,269 units, while exports rose by 54% to 95,229 units.

More than four out of five cars built last month were for export, with shipments to major destinations rising “dramatically” compared with 2020, said the SMMT.

Exports to the EU, US and Asia were all up in March, by 33.5%, 36.4% and 54.1% respectively.

The EU remained the number one market for UK-made cars, with just over half of all exported cars heading across the Channel.

Combined output of battery electric (BEV), plug-in hybrid (PHEV) and hybrid vehicles (HEV) amounted to a fifth of all cars built last month, up from 13.7% a year ago.

Mike Hawes, SMMT chief executive, said: “The first rise for UK car production since summer 2019 is a major step in the right direction but belies the underlying situation.

“With factories shut for much of March 2020, output was always going to be up but it remains below average, with some £11 billion worth of production lost over the past year.

“Whilst the Covid situation is improving in the UK and in some major export markets, manufacturers are still struggling to manage residual issues, most notably the global semiconductor shortage.

“The shift towards electrified vehicle production is fundamental to the future of this vital sector.

“Securing investment for this transformation will depend on the global competitiveness of our industry.

“Companies are already having to absorb additional costs arising from our new trading arrangements with the EU, but must also invest in new technologies, new processes and upskilling the workforce.”

The SMMT forecast that over a million cars will be built this year, 130,000 more than in 2020 when the pandemic saw production fall to its lowest level since 1984.