Supply challenges will persist in the automotive industry throughout 2022

Responding to the latest SMMT UK car manufacturing data, Richard Peberdy, UK head of automotive at KPMG, said:

“Frustratingly for manufacturers and consumers alike, 2022 will start with the same supply shortages that have limited production throughout 2021.

“Despite investment going into increasing chip production, the backlog of demand for the variety of sectors and goods that require them means that supply challenges will persist in the automotive industry throughout 2022, albeit these will probably ease as the year goes on.

“As component supply issues ease, production will increase to meet pent-up vehicle demand.  But I’d argue that we are entering a ‘new normal’ for car manufacturing and we won’t again see the levels of over-production and discounting that we did pre-pandemic.   Instead, manufacturers will focus volume on more profitable vehicles and markets.  Demand will change too and in light of sustainability concerns and hybrid working, consumers will be rethinking what they drive and how they access and pay for mobility more widely.”

ENDS.

For further comment or interview, contact:

Steven Reilly-Hii, Media Relations Manager, KPMG,

Email: steven.reilly-hii@kpmg.co.uk

Phone: 07510 376635

About KPMG

KPMG LLP, a UK limited liability partnership, operates from 21 offices across the UK with approximately 16,000 partners and staff.  The UK firm recorded a revenue of £2.3 billion in the year ended 30 September 2020. KPMG is a global organisation of independent professional services firms providing Audit, Legal, Tax and Advisory services. It operates in 147 countries and territories and has more than 219,000 people working in member firms around the world. Each KPMG firm is a legally distinct and separate entity and describes itself as such. KPMG International Limited is a private English company limited by guarantee. KPMG International Limited and its related entities do not provide services to clients.