Car production in Britain fell to its lowest level in 65 years in 2021 as the result of a global shortage of microchips and broader Covid-19 disruptions, but the rapid shift to electric vehicles offered a glimmer of hope.
The number of cars made in the UK fell to 859, 575 last year, 6.7 per cent less than 2020 when the Covid-19-crisis also hampered production and a third less than in 2019 when more than 1.3 million cars rolled off production lines.
On a brighter note, UK electrified vehicle output rose 30 per cent, with factories turning out a record 224,011 battery electric, plug-in hybrid and hybrid electric vehicles – accounting for more than a quarter of total production.
"2021 was another incredibly difficult year for UK car manufacturing – one of the worst since the Second World War," SMMT chief executive Mike Hawes said.
“Despite this miserable year, there is optimism. With Brexit uncertainty largely overcome, investments have been unleashed, most of which will help transform the sector to its zero-emission future.”
While Britain's economy as a whole has largely recovered from the losses caused by Covid-19 – with economic output in November back at pre-pandemic levels – car production in December was 12.7 per cent lower than a year earlier.
The global shortage of semiconductors was the biggest reason for the weak production figures, the SMMT said, because between 1,500 and 3,000 computer chips are used in an average car to control dashboard displays, electric windows, windscreen wipers and lights.
“It’s another example showing how the ongoing supply chain crisis is holding back manufacturing growth, and although new chip manufacturing plants are being built around the world, there is no easy fix to the problem, as many will take years to become fully operational,” said Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown.
Staff absences caused by Covid and the closure of car showrooms during lockdowns in early 2021 also played a role in the dismal car figures, while the shutdown of Honda's car plant in Swindon in the south of England in July was another factor as the manufacturer previously accounted for about 10 per cent of British car production, with the company blaming the closure on low sales across Europe and not because of Brexit.
While more than 80 per cent of British car production is exported, most of it to the European Union, with new trade barriers a major concern for many manufacturers, Mr Hawes said confidence in Britain's automotive industry rose after the agreement of a trade deal with the EU at the end of 2020.
Meanwhile, £4.9 billion ($6.57bn) of potential investment unveiled by carmakers last year, including a new battery plant from Nissan and upgraded sites owned by Vauxhall, Ford and Aston Martin, was a positive sign for the industry, Mr Hawes said.
Another positive sign is the rapid increase in the production of electric and hybrid cars, as the industry approaches a crossroads, with the end of the road in sight for new diesel and petrol models, which cannot be sold from 2030.
Ms Streeter, however, said many consumers are still hesitant about joining the electric vehicle revolution because of range anxiety.
“With charging networks patchy in many parts of the UK, despite promises that a big roll-out is on the way, it’s unlikely we’ll see an immediate rush of new converts, especially given the cost-of-living squeeze and most EV models coming in at a higher initial price point," she said.
"With car manufacturers across the board investing billions in EV production, it’s clear mass adoption will come, once the infrastructure is in place and if the chip shortage can also be overcome.”
Jaguar Land Rover was Britain's biggest car maker in 2021, with 220,554 units, followed by Nissan with 204,522 and BMW's Mini with 186,762 vehicles.
Benefits of first-time home buyers' scheme
- Priority access to new homes from participating developers
- Discounts on sales price of off-plan units
- Flexible payment plans from developers
- Mortgages with better interest rates, faster approval times and reduced fees
- DLD registration fee can be paid through banks or credit cards at zero interest rates
Living in...
This article is part of a guide on where to live in the UAE. Our reporters will profile some of the country’s most desirable districts, provide an estimate of rental prices and introduce you to some of the residents who call each area home.
Huroob Ezterari
Director: Ahmed Moussa
Starring: Ahmed El Sakka, Amir Karara, Ghada Adel and Moustafa Mohammed
Three stars
In numbers: PKK’s money network in Europe
Germany: PKK collectors typically bring in $18 million in cash a year – amount has trebled since 2010
Revolutionary tax: Investigators say about $2 million a year raised from ‘tax collection’ around Marseille
Extortion: Gunman convicted in 2023 of demanding $10,000 from Kurdish businessman in Stockholm
Drug trade: PKK income claimed by Turkish anti-drugs force in 2024 to be as high as $500 million a year
Denmark: PKK one of two terrorist groups along with Iranian separatists ASMLA to raise “two-digit million amounts”
Contributions: Hundreds of euros expected from typical Kurdish families and thousands from business owners
TV channel: Kurdish Roj TV accounts frozen and went bankrupt after Denmark fined it more than $1 million over PKK links in 2013
The President's Cake
Director: Hasan Hadi
Starring: Baneen Ahmad Nayyef, Waheed Thabet Khreibat, Sajad Mohamad Qasem
Rating: 4/5
Learn more about Qasr Al Hosn
In 2013, The National's History Project went beyond the walls to see what life was like living in Abu Dhabi's fabled fort:
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Where to buy
Limited-edition art prints of The Sofa Series: Sultani can be acquired from Reem El Mutwalli at www.reemelmutwalli.com
Qosty Byogaani
Starring: Hani Razmzi, Maya Nasir and Hassan Hosny
Four stars
The cost of Covid testing around the world
Egypt
Dh514 for citizens; Dh865 for tourists
Information can be found through VFS Global.
Jordan
Dh212
Centres include the Speciality Hospital, which now offers drive-through testing.
Cambodia
Dh478
Travel tests are managed by the Ministry of Health and National Institute of Public Health.
Zanzibar
AED 295
Zanzibar Public Health Emergency Operations Centre, located within the Lumumba Secondary School compound.
Abu Dhabi
Dh85
Abu Dhabi’s Seha has test centres throughout the UAE.
UK
From Dh400
Heathrow Airport now offers drive through and clinic-based testing, starting from Dh400 and up to Dh500 for the PCR test.
Tailors and retailers miss out on back-to-school rush
Tailors and retailers across the city said it was an ominous start to what is usually a busy season for sales.
With many parents opting to continue home learning for their children, the usual rush to buy school uniforms was muted this year.
“So far we have taken about 70 to 80 orders for items like shirts and trousers,” said Vikram Attrai, manager at Stallion Bespoke Tailors in Dubai.
“Last year in the same period we had about 200 orders and lots of demand.
“We custom fit uniform pieces and use materials such as cotton, wool and cashmere.
“Depending on size, a white shirt with logo is priced at about Dh100 to Dh150 and shorts, trousers, skirts and dresses cost between Dh150 to Dh250 a piece.”
A spokesman for Threads, a uniform shop based in Times Square Centre Dubai, said customer footfall had slowed down dramatically over the past few months.
“Now parents have the option to keep children doing online learning they don’t need uniforms so it has quietened down.”
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