Nissan bosses confident of bright future as UK car industry recovers from 'dismal' 2021

Nissan bosses say the future for the firm’s Sunderland plant is bright despite the UK car industry seeing production fall to its lowest level in more than 60 years.

UK car production fell by 6.7% in 2021 , to just 859,575 units, according to figures released by the Society of Motor Manufacturers and Traders (SMMT) – the worst total since 1956.

Output was 61,353 vehicles less than 2020, which itself had already been badly affected by coronavirus lockdowns, and was 34% below pre-pandemic 2019.

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The SMMT says the ‘dismal’ overall poor performance can be attributed to several factors, most of them direct consequences of the pandemic.

The shortage of semiconductors, a critical component in modern car manufacturing, was the principal cause of the decline, with factories having to reduce or even pause production while awaiting parts whose supply has been heavily constrained by the global pandemic.

Sunderland’s Nissan factory was among car plants nationwide hit hard by the shortage.Manufacturers were also affected by wrestled with staff shortages arising from the need to self-isolate and depressed demand for new cars with showrooms closed for months due to lockdowns and despite the success of ‘click and collect’ services.

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There were also non-Covid issues behind the fall, most notably the closure of Honda’s Swindon plant in July, which accounted for around a quarter of the annual decline.

More positively, the shift to electrified vehicle manufacture continued apace. British car factories produced a record number of battery electric, plug-in hybrid and hybrid electric vehicles, turning out almost a quarter of a million zero and ultra-low emission vehicles.

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Nissan's Sunderland plant has been hit by the global semiconductor shortage
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A Nissan spokesman said: “Our volumes for last year reflect the challenges currently faced by our industry, but the future is bright.

“Our world first EV36Zero project will transform Nissan Sunderland into a flagship EV hub, and our top class team is pushing ahead with this vision which brings together electric vehicles, renewable energy and battery production, and sets a blueprint for the future of the automotive industry.”

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The SMMT says the latest independent production outlook for 2022 forecasts UK car production to increase to more than one million units, representing a 19.7% uplift on the 2021 total, despite the loss of production in Swindon.

The organisation believes that with favourable conditions, including an end to the global chip shortage, new models coming on stream and the avoidance of additional trade barriers, car production could continue to climb and reach 1.1 million in 2025, with further growth beyond.

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Chief executive Mike Hawes said 2021 had been ‘another incredibly difficult year for UK car manufacturing, one of the worst since the Second World War’.

“Despite this miserable year, there is optimism,” he added.

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"With Brexit uncertainty largely overcome, investments have been unleashed, most of which will help transform the sector to its zero-emission future.

"This is a vote of global confidence in the UK but must be matched by a commitment to our long-term competitiveness; support for the supply chain in overcoming parts shortages, help with skills and training and, most urgently, measures to mitigate the escalating energy costs which are threatening viability.”

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