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Car production nosedives despite rising sales of electric vehicles

Car production fell to its lowest January total in a decade despite an increase in the manufacture of electric vehicles, new figures show.

Almost 68,800 cars left factories in January, down by 20 percent on a year ago and the worst figure for that month since 2009, said the Society of Motor Manufacturers and Traders (SMMT).

Production for overseas and domestic markets was down by 17.5 per cent and 30.8 per cent respectively.

Battery electric vehicle production was up a third, with one in 11 cars rolling off factory lines zero emission.

Including plug-in hybrids and hybrids, electrified vehicles accounted for more than a quarter of output.

The worldwide shortage of semiconductors was still affecting production as well as the changeover of some popular models, said SMMT.

Exports accounted for more than eight in 10 cars made, with the EU remaining the largest destination for UK-made cars, taking 59.1 per cent of exports, followed by China (10.4 per cent) and the US (10 per cent).

Mike Hawes, SMMT chief executive, said: “It’s another torrid start to the year as global supply issues and structural changes squeeze output while model changes impact production scheduling.

“The UK automotive manufacturing industry is, however, fundamentally strong and recent investment announcements are testament to the potential for growth, not least in terms of rising EV (electric vehicle) production.

“Long-term recovery can only be delivered, however, if global competitiveness is assured and for that we must address both inflationary and fixed costs, most obviously escalating energy prices, but also fiscal and trading costs.

“Every measure must be taken if we are to secure a bright, electrified future for our world-class automotive manufacturing base and the high-skilled, high-value jobs it creates across Britain.”

Independent expectations for UK car production have been revised down from the autumn outlook by 2.4 per cent, to around 979,000 units for 2022.

Richard Peberdy of accountancy giant KPMG, commented: “The start of 2022 has certainly provided car makers with more confidence than this time last year in the industry’s ability to avoid paused production lines, closed showrooms and staff isolating, but they will be pondering whether the cost of living squeeze, which includes rising fuel prices and energy costs, begins to slow the demand that currently outpaces supply.”

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