Budget Fails Struggling Motor Industry

Mon 1st Nov 2021

While last week’s Budget may have been hailed as a good one for motorists with a fuel tax freeze and billions invested into roads, the UK motor industry have called it disappointing.

Production levels were at their lowest levels for 39 years last month, down 41.5 per cent on the previous year, with only 67,169 leaving factories across the country. While the country is still coming to terms with the aftermath of the pandemic impact, and the conversion to electric powertrains, it’s biggest problem has been the global shortage of semiconductors, which has stalled production lines at almost every manufacturer.

A recent poll from the Society of Motor Manufacturers and Traders found that eight out of ten firms had been negatively impacted, with reduced orders, delays and disruption leading to redundancies in some cases. Many manufacturers have actually requested an extension to the Government’s Coronavirus Job Retention Scheme, claiming that the industry is still feeling the effects of the pandemic, even though the wider public is returning to normality.

“The substantial decline in UK car output in September continues the worrying trend we have seen over the past three months,' he explained in a statement today,” said Mike Hawes, SMMT chief executive.

“The industry is continuing to battle the effects of the pandemic with the shortage of semiconductors stalling production. 

“Whilst there was welcome news in the Budget to support the transition to zero emission vehicle production, battery manufacturing and supply chains, it missed the opportunity to offer meaningful short-term support given Covid-related supply constraints and rising energy bills. 

“This is disappointing given the sector’s importance and its ability to create well-paid jobs across the regions and the revenues it generates, notably from exports.”

While a lack of orders has been blamed for the slump in output, it has to be noted too that the closure of Swindon’s Honda plant will also have impacted production.