Car manufacturers continue to wrestle with global supply chain issues, the impact of new EU trading arrangements and covid recovery and lockdowns, according to the Society of Motor Manufacturers and Traders (SMMT).

A member survey revealed 90% are “expending additional resource” managing UK/EU trade requirements and 60% of large firms expect covid recovery to take at least six months.

March output for the domestic market rose 19.4% to 20,269 units with exports also increasing, up 54.1% to 95,229 units. More than 80% of cars were sent overseas in March, with shipments to major destinations rising dramatically compared with 2020 when many markets were already shut before the UK itself entered lockdown.

Mike Hawes, SMMT CEO, said: “The first rise for UK car production since summer 2019 is a major step in the right direction but belies the underlying situation. With factories shut for much of March 2020, output was always going to be up but it remains below average, with some £11bn worth of production lost over the past year. 

“Whilst the Covid situation is improving in the UK and in some major export markets, manufacturers are still struggling to manage residual issues, most notably the global semiconductor shortage. 

“The shift towards electrified vehicle production is fundamental to the future of this vital sector. Securing investment for this transformation will depend on the global competitiveness of our industry. 

“Companies are already having to absorb additional costs arising from our new trading arrangements with the EU, but must also invest in new technologies, new processes and upskilling the workforce. A competitive business environment that helps reduce operating costs and policies that support manufacturing will be essential if the transition to zero is to be Made in the UK.”