UK car production rose 13.3% in May, the first growth after a 10-month slump but still down on pre-pandemic levels.

UK car production was up 13.3% in May, the first growth after 10 consecutive months of decline

A total of 62,284 cars rolled off factory lines last month, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT). That’s despite Honda’s closure of its Swindon plant last year and a key model changeover at another manufacturer.

Production for both overseas and domestic markets were up, by 8.9% and 39.5% respectively. Exports accounted for 82.1% of all new cars built, with almost six in 10 of these heading to the EU. But shipments to the US decreased by 35.4% in line with the shutting of Honda’s plant.

Output of zero- and low-emission models continued to grow at pace. Battery electric vehicles (BEVs) more than doubled, increasing by 108.3%, with 4,525 built. And more than one in five (22.6%) of all cars producted last month was alternatively fuelled, up from 19.3% last year.

But behind the headline news lie some more sombre facts. Last month’s overall rise is in comparison to May 2021, which was still under significant pandemic pressures, and output remains 46.3% below pre-pandemic May 2019. The much-discussed chip shortage, plus increasing economic uncertainty, rising business costs and disruption caused by the war in Ukraine are all taking their toll.

The SMMT has also warned this week that manufacturers are facing a £90m increase on their energy bills, which are already 59% higher than the EU average. In its new report, From Full Throttle to Full Charge, it’s urged for government action on measures on energy, skills and funding to drive large-scale investment and support competitiveness.

Mike Hawes, chief executive, elaborated: “With the industry racing to decarbonise, we need to safeguard manufacturing competitiveness, drive investment and develop the skill base. Government and industry have a role to play in this transformation and collaboration will be essential if the UK is to remain at the forefront of automotive innovation.”

Richard Peberdy, UK head of automotive at KPMG, also stressed the huge impact of rising energy costs on the industry: “The UK automotive sector’s recovery from the disruption of the last two years remains deeply troubled. High energy costs are clearly part of that picture and will further challenge the resilience of UK car makers.

“Amidst a cost of living squeeze and very limited new vehicle supply, passing increased costs back to the consumer is far from easy. Whilst at a time of great innovation for the industry, having to cut R&D budgets or investment risks future growth and market position.”