CEO Update

Staff and chip shortages hamper production recovery

29 July 2021 #CEO Update

It has been a challenging first half of the year for UK automotive production as the sector continues to suffer from the effects of the global pandemic. Despite 498,923 units rolling off production lines since January – up 30.8% on the first half of 2020 – this represents a near 40% decline over the five-year pre-pandemic average. Production of commercial vehicles has also declined, by -20.9% on pre-pandemic levels for the first half of 2021 and engine output has dropped too, by -31.5% over the same period.

A revival for the sector is being held back as a result of both self-isolation rules leading to staff shortages across factory floors (and, indeed across the wider sector including retail, service and repair), and the shortage of semiconductors, which shows no signs of easing until the end of the year. There are no quick fixes for what is a global supply issue, however steps can be taken now to alleviate the ‘pingdemic’ and its effects on automotive production.

Businesses have done everything they can to ensure their facilities are Covid secure, so the government should look at bringing forward the August 16 target date for exempting fully vaccinated adults from self-isolation as well as adopting a “test to release” scheme to protect employees who are not fully vaccinated yet.

The industry is fundamentally strong and has the capability to recover. A look at the latest investment announcements into new models and battery production, including major commitments to Ellesmere Port, Norfolk and Sunderland, shows a bright future is within reach. Yet, we must do more to ensure industry competitiveness at this critical moment. Steps such as creating a Build Back Better Fund, and the alleviation of high energy costs, will help the sector get back on track and towards the volumes that make UK facilities viable.

I’m delighted to announce that tickets can now be purchased by members for SMMT’s Annual Dinner on Tuesday 23 November 2021. Following last year’s virtual affair, we are expecting to hold this event in person, albeit at a reduced capacity, and it remains one of the most prestigious occasions in the automotive calendar, attended by guests from industry, government and media.

This year will see SMMT President, Dr George Gillespie OBE, Executive Chairman, HORIBA MIRA give a keynote speech alongside a guest speaker to be announced in due course. To purchase tickets, please contact

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