UK car production slumps by a quarter in January

The number of cars built in the UK fell by 27% last month, the worst January figure for over a decade, as coronavirus shutdowns and post-Brexit border friction hampered production.

The Society of Motor Manufacturers and Traders (SMMT) said just over 86,000 cars were built, a fall of 32,262 compared with January last year.

Chief executive Mike Hawes said the numbers were cause for "grave concern".

January marked the 17th consecutive month of decline in output.

The trade industry body suggested that the ongoing impact of the coronavirus crisis, extended factory shutdowns, global supply chain problems, and friction in the new post-Brexit trading arrangements, had all contributed to the fall.

Despite these challenges, exports accounted for more than eight in 10 of all cars made last month. But shipments to major markets including the European Union (EU), United States and Asia were all significantly lower, it said.

The cost of lost car production has increased to more than £11bn since a year ago, the SMMT found.

Mike Hawes said that next week's Budget would present Chancellor Rishi Sunak with "an opportunity to boost the industry by introducing measures that will support competitiveness, jobs and livelihoods."

The research also found that UK production of battery electric (BEV), plug-in hybrid (PHEV) and hybrid vehicles (HEV) continued to grow from last year, with combined output of these vehicles rising 18.9% in January to 21,792 units.

More than one in four of all cars leaving factories was built to run on alternative fuels.

"Whilst there have been some very welcome recent announcements, we need to secure our medium to long-term future by creating the conditions that will attract battery 'gigafactory' investment and transform the supply chain," Mr Hawes said.

These latest figures come as the fate of Vauxhall's Ellesmere Port car factory, which makes the petrol-fuelled Astra, hangs in the balance.

Stellantis, Vauxhall's parent company, has been in talks with the government for weeks about the site, which employs more than 1,000 people. It is thought the firm is seeking financial incentives to make a fully electric car at the factory.

There are fears Stellantis, formed from the merger of France's PSA Group and Fiat-Chrysler, may choose to close the factory instead.

Stellantis bosses have previously voiced concern about the UK's decision to bring forward a ban on new petrol and diesel cars to 2030.

The firm is only likely to invest in making a new generation of electric cars in the North West of England if it is confident that the UK will be able to build the necessary battery production facilities to service Ellesmere Port and other UK car plants.

A government spokesperson said on Thursday that it was "committed to ensuring the UK continues to be one of the best locations in the world for automotive manufacturing.

"We're doing all we can to protect and create jobs, while securing a competitive future for the sector."