As summer 2021 drew to a close, data from the Society of Motor Manufacturers and Traders (SMMT) showed that UK car plants produced 53,400 vehicles in July 2021. This represented a 37.6% drop when compared to July 2020, a month that was also heavily affected by the pandemic. However, there are also some encouraging signs for the car manufacturing industry.  

What’s causing the problem?  

As we’ve previously discussed, the global semiconductor shortage which has arisen as a result of the pandemic is the main culprit as it is still causing major supply chain issues globally. In the UK, this issue was exacerbated by the ‘pingdemic’, which caused major staff shortages in many sectors of the economy as the NHS Covid app instructed workers to self-isolate following possible exposure to Covid-19, before the government acted to change the app in August to reduce this kind of disruption.  

The worldwide computer chip shortage could be seen to be especially frustrating for the motor industry as the demand for new cars has actually remained stronger than many predicted at the beginning of the pandemic. However, the fact that this demand exists can only be a good sign. In addition, the knock-on effect of unprecedented demand and price increases in the used car market all point to a positive future for the industry. After all, at the beginning of the pandemic in 2020, many experts were seriously concerned about a potential pandemic-related collapse in demand for big ticket purchases like cars.  

Some positive news for electric vehicles  

With semiconductors being a vital component in everything from in-car entertainment to driver assist systems, no area of motor manufacturing has escaped unscathed. However, the crisis has had an unexpected positive effect on the production of electric cars. This is because some car manufacturers have decided to prioritise producing electric vehicles so that they can meet the lower average emission requirements that were introduced in early 2020. This trend is reflected in the fact that in August 2021 there was a 32.2% increase in electric cars sold in the UK compared to August 2020, despite the fact that overall car sales declined 22% year on year in August 2021.  

While the semiconductor crisis continues to affect all car production, it is good news that the issue is forcing carmakers to concentrate on the greener driving future that they will need to focus on anyway as governments across the world work towards carbon neutrality.  

What lessons can be learned from the computer chip shortage?  

No one is expecting the situation to improve before the end of 2021, however, there is more positive news in that carmakers including Daimler, VW and BMW have indicated that they expect the situation to get back to normal in 2022 and Stellantis has told investors that they can expect a brighter picture by winter.  

Clearly the main lesson for car manufacturers and governments alike is the fact that they failed to predict the fragility of a supply chain that is so heavily reliant on computer chips at the beginning of the pandemic. This may be understandable, given the myriad more urgent problems that needed to be dealt with at the time. However, as the industry recovers from this most recent crisis, it’s going to be important to put in contingency plans for similar events in the future. 

In the short term, industry insiders are calling on the government to help alleviate the pressure with measures such as cuts to business rates and reducing energy costs.  

Innovating for a better future  

As the motor industry battles to overcome this latest obstacle, Interflex continues to develop high performance and lightweight insulation materials to meet the emerging demands of the new greener future of the motor industry.  

To find out more about Interflex’s NVH solutions for the automotive industry, please call us on 01949 861491 or email sales@interflex2000.com.