Impossible to disguise the reality: “Last year was catastrophic”, recognizes Mike Hawes, director of the Society of Motor Manufacturers and Traders (SMMT), the body representing the automotive industry in the United Kingdom. Only 859,000 vehicles rolled off British production lines, making it the worst year since 1956. It’s even worse than 2020 (-7%), when the pandemic had closed factories for several months. And that’s a far cry from the 2017 peak of 1.7 million.
The explanation is the same as everywhere in the world: factories are facing a shortage of microchips. Many are idling or have been forced to close temporarily. The situation, Mr. Hawes hopes, should gradually improve this year, with a return to near-normal production rates in the second half of the year.
Beyond this crisis, and the rapid transition to electric or hybrid vehicles (now a quarter of British production), which are topics shared around the world, the British automotive industry is also experiencing a particular situation: the Brexit. After the 2016 referendum in favor of leaving the European Union, it was strongly opposed to leaving the European single market, knowing that it sells more than half of its production in Europe and that it imports the majority of its spare parts. Since then, investments in the sector have collapsed, from 2.5 billion pounds (3 billion euros) in 2015 to 1.1 billion in 2019. “During this period, because of the uncertainty, it had become very difficult for the factories to go to see their headquarters and propose to them to invest, explains Mr. Hawes. We lost opportunities because of that. »
Lost Opportunities
The permanent closure in July 2021 of the Honda factory in Swindon, in the west of England, which had been open for thirty-six years, is one of these lost opportunities. It employed 3,000 people.
Nevertheless, the signing of an agreement on the terms of Brexit at the end of 2019, and above all a free trade agreement with the European Union at the end of 2020, made it possible to turn the page. “This one is as good as one could have hoped for within the political constraints that existed”, diplomatically explains Mr. Hawes. Clearly, there are no customs duties on cars or spare parts, but there are still a lot of paperwork to fill out and new regulations. “There is friction”he says.
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