UK: Staff and supply shortages blamed for car industry's poor performance

Staff absences and supply shortages have been blamed for the UK’s low levels of new car production in June. Figures from the Society of Motor Manufacturers and Traders (SMMT) show just over 69,000 new cars were built on these shores last month; the second-lowest result since 1953.

The SMMT data reveals 69,097 new cars were built in UK factories during June – an increase of just over 22 percent on the same month last year. However, if we forget 2020, when the industry was rocked by an unprecedented pandemic, the SMMT says that figure represented the worst June for UK car production since 1953.

It’s a statistic the SMMT is blaming on global chip shortages and staff shortages due to self-isolation. With the easing of Covid-19 restrictions, cases have increased and more people are being told to self-isolate after coming into contact with someone who has tested positive. It’s this so-called ‘pingdemic’ that the SMMT claims is cutting the staff at UK car factories and “putting production at risk”.

As a result, the SMMT has called on the government to “mitigate the impact of self-isolation or risk further blow to recovery”. Mike Hawes, the chief executive, said he wanted the government to bring forward the August 16 date for exempting fully vaccinated people from self-isolation and introduce a ‘test-to-release’ scheme for those who aren’t yet fully vaccinated.

However, the organisation, which represents the UK’s car dealers and factories, says the drop in output is “primarily” due to the worldwide shortage of semiconductors. In fact, the SMMT says an “independent study” suggests the shortage could cut planned UK car production by up to 100,000 units this year.

During the first half of 2021, the figures show just under 500,000 new cars were built in the UK, up from around 381,000 during the first six months of 2020. However, that figure represents a 38.4-percent reduction on the average for the first six months of every year from 2015 to 2019.

“While the UK automotive industry continues to suffer the effects of the global pandemic, with first half year production down significantly and a tough few months looming, the sector has the capability to recover,” said Hawes. “The latest investments into new models and battery production show a bright future is within reach, yet the industry still faces headwinds most notably from global semiconductor shortages and staff absenteeism as a result of staff being ‘pinged’.

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“Businesses have ensured their facilities are Covid secure but urgent action is needed, such as bringing forward the August 16 target date for exempting fully vaccinated adults from self-isolation and introducing a “test to release” scheme to support those employees not yet fully vaccinated.

“Operating conditions are still challenging, however, highlighting the need for specific actions to help competitiveness, such as creating a Build Back Better Fund and the alleviation of high energy costs, to get the sector back on track and towards the volumes that make UK facilities viable.”