Car makers will be pondering cost-of-living squeeze impact

Commenting on SMMT car manufacturing data for January: Richard Peberdy, UK Head of Automotive at KPMG, said:

“Overall volumes are still lower than pre-pandemic and will remain so until chip supply shortages are resolved.  But car manufacturers will be pleased that 2022 has begun with healthy demand for the vehicles they are producing, much of which are higher-margin models. 

“The start of 2022 has certainly provided car makers with more confidence than this time last year in the industry’s ability to avoid paused production lines, closed showrooms and staff isolating.  But they will be pondering whether the cost-of-living squeeze, which includes rising fuel prices and energy costs, begins to slow the demand that currently outpaces supply.  

Manufacturers are also coming under their own inflationary pressures, with the challenge of how to absorb those, or pass them on to already squeezed consumers. 

The industry also faces the familiar challenge in the year ahead of ensuring the next generation of skilled employees is coming through.”

For further comment or interview:

Steven Reilly-Hii

Media Relations Manager (Industrial Manufacturing, Automotive, and Future Mobility)

KPMG LLP

E: steven.reilly-hii@kpmg.co.uk

T: 07510 376635

About KPMG

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