Another year brings another set of challenges for the motor industry. January is ending with headlines announcing that UK car production has plummeted to levels not seen since 1956, with British car factories producing 775, 000 cars in 2022 compared to 859,000 in 2021 and 55% less than the most recent peak of 1.72 million seen in 2016.
Myriad challenges
Commenting on the figures, the chief executive of the Society of Motor Manufacturers and Traders (SMMT), Mike Hawes pointed out that UK motor manufacturers had been more badly affected than global counterparts by supply chain problems caused by the semiconductor shortage, the lack of components from Chinese suppliers affected by harsh Covid lockdowns and the shortage of wiring harnesses from Ukraine.
Add to that the backdrop of the cost of living crisis, a shortage in the labour market and the chaotic political situation in the UK which saw three prime ministers and four chancellors in 2022 alone, and it’s fair to say the industry is emerging from an incredibly challenging set of circumstances as it embarks on 2023.
Regulatory concerns
The UK is also operating in a climate of regulatory uncertainty, with the most pressing issue being the tightening of ‘rules of origin’ regulations which state that more parts need to be sourced locally to avoid a 10% import and export tax. As a UK-based supplier to major OEMS, here at Interflex, we believe this new rule may have a positive effect on manufacturers like ourselves, who produce innovative, competitively-priced materials for the motor industry with a low carbon footprint, such as our new lightweight material Ocean.
Will production go up in 2023?
The often-challenged motor industry is a famously resilient one and there are some positives to focus on as it gears up for what undeniably will be another difficult year. The main data to focus on is that the SMMT has predicted that despite the downturn, car production should increase in 2023 to 842,000. While this is a modest improvement and nowhere near the highs of 2016 or even pre-pandemic levels of 2019 when 1.3 million vehicles were produced, it does offer reasons to be optimistic for a return to an upward trend in the medium to long term.
A boom in luxury vehicles
When it comes to the highest end of the sector, the story couldn’t be more different, with luxury car manufacturers reporting their highest ever production and profits. In 2022, Rolls Royce produced more than 6,000 vehicles from its Goodwood base, while in Crewe, Bentley surpassed 15,000 units for the first time. While these UK-based brands represent a tiny share of the market and are now owned by BMW and Volkswagen respectively, this is undoubtedly good news for the employees and suppliers of these iconic names in British motoring.
What about the move to EVs?
With rising costs of electricity and pressures on the EV charging infrastructure, it will take more than the recent drop in the price of Teslas to encourage UK-based drivers to make the much-needed switch to greener driving.
However, with the government committing £1.6 billion in schemes and grants to increase charging points, there is hope that the current issue of a lack of consumer confidence in the availability of charging points will start to be addressed in 2023.
Innovating in 2023 and beyond
Interflex supply a wide range of NVH and insulation solutions for the automotive industry and beyond, focusing on lightweight materials and sustainable, cost-effective options. To find out more, please call us on 01949 861 494, or email us at sales@interflex2000.com.