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Automobile production in the United Kingdom increases once more, but the sector warns of “alarming” energy costs.

The surge raises optimism that a global shortage of components such as semiconductors, which has impacted production, may be easing, however, it is cautioned that a “complete recovery may take some time” due to the COVID-19 epidemic.

Automobile manufacturing has increased for three consecutive months, indicating that component shortages may be lessening, while the industry has warned of the impact of “alarming” energy price increases.

The Society of Motor Manufacturers and Traders reported that 58,043 automobiles were manufactured in the United Kingdom in July, an increase of 8.6% over the same month last year (SMMT).

Automobile production in the united kingdom increases once more, but the sector warns of "alarming" energy costs.
Automobile production in the United Kingdom increases once more, but the sector warns of "alarming" energy costs.

The group expressed optimism that a global shortage of components such as chips, which has affected auto manufacturing, may be easing.

The SMMT cautioned that the continued growth “must be viewed in context” given the comparison with the same month last year, which was the worst July in over six decades as carmakers struggled with parts shortages and coronavirus-related staff absences, causing many factories to alter their summer shutdown schedules.

Despite the recent increase in output, levels are still less than half of pre-pandemic levels, indicating that “complete recovery is still some distance away.”

Production for the British market increased by 40.7% to 11,583 units, while exports increased by a more modest 2.6%.

Shipments continued to drive the industry, accounting for eight out of every ten automobiles manufactured, despite declines in exports to main markets the EU and US of 7.3% and 22.8%, respectively, and increases in orders from China and Japan of 54% and 40%.

Nearly one-third of all vehicles produced in July were either electric or hybrid, totaling approximately 17,356 vehicles.

Mike Hawes, chief executive officer of the Society of Motor Manufacturers and Traders (SMMT), stated, “A third consecutive month of rising for UK auto manufacturing is, of course, encouraging and gives some confidence that supply chain concerns plaguing the industry may finally be beginning to abate.

“However, additional obstacles remain, not the least of which are the escalating energy costs.”

“Immediate action is required to offset these costs to make the United Kingdom more competitive for manufacturing if we are to attract much-needed investment for the production of zero-emission vehicles.”

This must be a top priority for the next prime minister; otherwise, we will fall farther behind our global competitors, jeopardizing jobs and economic progress.

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