UK vehicle production in 2023 hit one million units for the first time since pre-Covid 2019, with multibillion-pound EV investment from major car makers pushing the UK “back in the game”, the Society of Motor Manufacturers and Traders (SMMT) said today.
SMMT chief Mike Hawes called the 1,025,474 total (905,117 cars, 120,357 commercial vehicles; up 17% year on year) a “surprise”, especially given the supply chain difficulties that hampered car makers in 2023. Shipping issues in the Red Sea, caused by Houthi militia ship attacks, are expected to bring more problems to the fore soon, he added.
Despite the surprise, the SMMT predicts fewer cars will be produced in 2024, although a push from commercial vehicle manufacturers, such as Vauxhall and its now-upgraded Ellesmere Port factory, will grow overall production to 1.04 million units.
As well as the predicted shipping issues, the SMMT expects output in 2024 to be hampered by car makers such as JLR swapping ICE production to EVs and getting factories ready for their electric futures. The ZEV mandate, which dictates that 22% of total cars sales must be electric, rising each year, is another potential hurdle.
“We are in a much better position than a year ago, but the challenges are unrelenting,” said Hawes.
The last-minute push back of the rules of origin agreement – a week before it was due to be implemented – has also stalled early-year production, with many car makers having already pushed back EV builds in case the deal fell through. Now due to take effect in 2027, the legislation limits where parts for an electric car can be sourced, with tariffs imposed on cars that fail to meet the rules.
“The first few months of EV production will be volatile as many manufacturers would have bet on the rules of origin deal not happening,” Hawes told journalists.
EVs are another big topic for the SMMT and Hawes has already called on the government to reduce VAT on electric car purchases – as happens for fleet buyers – as a type of buying incentive.
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