The UK car production increased by 34.4% in March 2023 compared to the same month last year, according to the latest figures released by the Society of Motor Manufacturers and Traders (SMMT). This is the first growth in car output since August 2022, as the industry recovers from the impact of the Covid-19 pandemic and the Brexit transition.
The SMMT reported that 115,498 cars were manufactured in the UK in March 2023, up from 85,973 in March 2022, when the first lockdown was imposed and factories were shut down. However, this is still 21.8% lower than the average March output of 147,732 units in the previous five years.
The growth in car production was driven by a low base of comparison, as well as an easing of supply constraints that have hampered the industry in recent months. The global shortage of semiconductors, which are essential for modern vehicles, has affected the availability of components and disrupted the production schedules of many carmakers.
The SMMT said that the situation is expected to improve over the course of the year, as more suppliers come online and the demand for chips stabilises. However, it warned that the recovery of the UK car industry remains fragile and dependent on the successful rollout of Covid-19 vaccines and the reopening of key markets.
Domestic and export demand both increased in March
The SMMT data showed that both domestic and export demand for UK-made cars increased in March 2023. The domestic market accounted for 19.4% of the total output, with 22,394 units produced, up 19.4% from March 2022. The export market accounted for 80.6% of the total output, with 93,104 units produced, up 36.6% from March 2022.
The SMMT said that the UK’s largest export destinations in March 2023 were the EU (54.9%), the US (18.3%), and China (7.3%). The EU market showed a strong recovery, with 51,129 units exported, up 33.5% from March 2022. The US market also showed a robust growth, with 17,045 units exported, up 50.9% from March 2022. The China market, however, saw a decline, with 6,797 units exported, down 9.8% from March 2022.
The SMMT said that the UK’s trade deal with the EU, which came into effect on January 1, 2023, has helped to avoid tariffs and quotas on car exports and imports. However, it said that the industry still faces challenges from new customs procedures, rules of origin requirements, and regulatory divergence.
Industry calls for more support and investment
The SMMT said that the UK car industry needs more support and investment from the government and the private sector to secure its long-term future. It said that the industry is undergoing a transformation, as it shifts to electrified and autonomous vehicles, and adapts to changing consumer preferences and environmental regulations.
The SMMT said that the UK has the potential to become a global leader in green mobility, with more than one million zero emission vehicles now on the road and cutting carbon. However, it said that the public chargepoint rollout continues to lag behind EV uptake, with one standard public charger for every 36 plug-in cars on the road, down from 31 in 2021.
Mike Hawes, SMMT Chief Executive, said: “After a year of unprecedented challenges, it is encouraging to see some green shoots of recovery in the UK car industry. The growth in March is a positive sign, but we are still far from pre-pandemic levels and the road ahead is uncertain. We need more support and investment from the government and the private sector to secure our competitiveness, boost our productivity, and accelerate our transition to net zero.”
