Russia’s invasion of Ukraine, Covid-19 lockdowns in China and ongoing shortages of computer chips have combined to stall a recovery in car manufacturing, leaving manufacturers unable to supply enough cars to willing buyers. The problems will cost the UK industry 113,000 sales this year, according to a forecast commissioned by the Society of Motor Manufacturers and Traders (SMMT), a lobby group. British factories built 403,000 cars in the first half of the year, down 19% on 2021, despite improvements in May and June. Production in June rose 5.6% year-on-year, even as Honda closed its Swindon plant and Vauxhall switched to making vans. Mike Hawes, chief executive of SMMT, said the industry was suffering in part from “protracted Covid” as the problems caused by the pandemic lingered. Semiconductor computer chip shortages “will definitely be with us this year and probably next year as well,” he said. Shanghai, a major source of parts as well as a major port, underwent a strict lockdown for two months in the spring. Russia’s aggression has added to the problems. Ukraine has been a major supplier of cables, cheap but critical components that hold cables together. Subscribe to the Business Today daily email or follow Guardian Business on Twitter @BusinessDesk “We are not yet in recovery from Covid,” Hawes said, despite “a degree of optimism”. The challenge is the supply.” The car industry has largely managed to avoid more recent problems on the UK’s shorter Channel crossings, which have been blamed on extra post-Brexit controls and high volumes of tourists. Industry has shifted to other ports such as Immingham in Lincolnshire and Southampton, which are less vulnerable to the tourist traffic that has wreaked havoc in recent days at Dover and Folkestone in Kent. However, Hawes said the industry was still affected by Brexit issues. The SMMT has written to the government to ask for an extension to the deadline for new type approvals after Brexit – requiring safety checks for every model sold. Before the UK left the EU, type approvals in other countries were valid for sale in Britain, but the government has given 18 months to introduce a new regime. It has so far failed to produce the regulation governing this scheme, leading to concerns in the industry about possible delays.
