Following the release of data today by the Society of Motor Manufacturers and Traders (SMMT), showing that UK car output declined by 6.7% to 859,575 units in 2021;

David Leggett, Automotive Analyst at GlobalData, a leading data and analytics company, offers his view:

“Last year’s output decline follows a 2020 Covid-ravaged drop of over a third on 2019. 2021’s car production level was the lowest annual UK car output total since 1956.

“While the headline numbers are obviously disappointing, special factors were at play and the underlying picture provides some grounds for optimism on this year’s prospects.

“Last year was heavily impacted by the global shortage of semiconductors and while shortages will persist in 2022, the industry expects the chips shortage and impacts to ease in the second half of the year. Demand for cars and light vehicles globally will recover in 2022 and that should flow more readily into production this year.

“GlobalData forecasts a global light vehicle market of 84.1 million in 2022 – about the same level as expected in 2021 if the chip crisis hadn’t intervened – and 5.2% ahead of 2021. It’s still modest but that gain will boost orders for UK car and van exports.

“Moreover, the investment picture in Britain is positive. Announced investment for the UK automotive sector reached a potential GBP4.9 billion in 2021, the highest total since 2013. Encouragingly, much of the investment is in support of electrified vehicles and the hope will be that momentum can be maintained.

“Of course, big challenges remain for the UK’s automotive industry – in securing even more investment in batteries and components for future electric vehicles and in addressing global competitiveness in the context of high energy prices and still fragile supply chains.

“However, the outlook for 2022 is for the industry in the UK to make over a million cars and be back on a recovery track, provided there is stability and some growth in vehicle markets around the world.”