By Ilaria Grasso Macola
2022 was the worst year for car production in the UK since 1992, according to new data published today.
Figures from automotive trade body the Society of Motor Manufacturers and Traders (SMMT) show that car registrations totalled 1.61 million in 2022, only just higher than 1992’s 1.59 million.
Last year’s output was down 700,000 units compared to 2019 levels as a result of the prolonged effects of the pandemic on car makers.
“Manufacturers have just really struggled to make the vehicles in sufficient quantities primarily due to semiconductor shortages, but there are other shortages behind that as well,” SMMT’s chief executive Mike Hawes told journalists.
Lockdowns in China as well as higher logistics and material costs were also partly to blame, the trade body added.
Nevertheless, the SMMT expects 2023 to be a year of recovery for the UK car industry as some of the supply chain issues are beginning to ease. The trade body expects a 15 per cent growth this year, which will be worth an additional £10bn.
According to Hawes, the pent-up demand for new cars will act as a buffer against the cost-of-living crisis.
“Undoubtedly in a recession there will be a weakening of demand,” the chief executive added. “But we have got so much headroom to recover.”
In terms of vehicle type, battery-electric vehicles accounted for 22 per cent of all new car registrations last year, surpassing diesel.
However, the government’s plans to introduce vehicle excise duty (VED) on electric vehicles (EV) as well as the expensive car supplement are seen as a major obstacle for EV uptake.
“We understood the application of VED to electric cars from 2025 at a standard rate,” Hawes explained.
“But the application of the expensive car grant is something that was more disappointing.”
The Treasury was approached for comment.
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