Following the release of data today by the Society of Motor Manufacturers and Traders (SMMT), showing that UK car production was down 32.4% in first quarter;

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

“The SMMT UK output numbers show that we’re still in the grip of supply chain bottlenecks constraining vehicle sales due to the global shortage of semiconductors.

“The global vehicle market outlook is somewhat mixed, with 2022 essentially flat.

“The global light vehicle market in 2022 is forecast by GlobalData to be just 0.4% up on 2021, at 81.75 million units, which is still some 9% below 2019’s pre-pandemic total of 90.16 million units. Recovery is on hold.

“On the upside, there are signs that the worst of the semiconductor crisis may be behind us. For one thing, many manufacturers are adapting to conditions and successfully prioritizing electric vehicles and other high margin models for sale. They are also having to manage supply chains, work with suppliers, and look for new solutions, for example in resolving a shortage of cable harnesses from Ukraine.

“There are other signs, too, that the semiconductor crisis for the industry is easing. Toyota’s global production in March hit a new record as production outside Japan surged, and many manufacturers are reporting gradually improving supplies of critical parts.

“On the downside, though, underlying demand trends globally give cause for considerable concern. A spike to price inflation is hitting real incomes and threatening to send interest rates much higher. As economic growth forecasts are being revised down, vehicle markets will be adversely impacted.

“Moreover, the war in Ukraine and its broader impacts, especially in Europe, continue to present a major uncertainty and risk. The pandemic continues to cast a cloud over the outlook in some markets–especially China, which is struggling with a Covid-zero strategy and seeing new lockdowns that will inevitably negatively impact economic activity.”