Comment on SMMT production data

Richard Peberdy, UK Head of Automotive at KPMG UK, said:

“Global inflationary pressures affecting materials like copper, steel, and oil are adding to the well-reported issues surrounding semiconductor supply, which continue to clip UK automotive output. And while the COVID-19 picture is improving, new outbreaks have forced some port shutdowns in China, creating new blockages in the global supply chain.

“Inventories have fallen to very low levels as production remains stifled and demand recovers. Carmakers are responding by focusing production on higher-margin models while developing and rolling out electric vehicles (EV) to safeguard market share and competitive positioning in this fast-growing part of the market.

“As EV production sustains momentum, it’s encouraging to hear that multiple manufacturers are in talks with the UK government over the construction of gigafactories. This won’t impact production in the near term, but their development will be crucial for the future of the UK automotive sector given the prohibitive nature of shipping heavy batteries from overseas.”

ENDS

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