Chip shortages continue to bite

Richard Peberdy UK head of automotive comment on August's SMMT production data

Richard Peberdy UK head of automotive comment on August's SMMT production data

Richard Peberdy, UK head of automotive at KPMG, said:

“Chip shortages continue to bite, but manufacturers will no doubt be reviewing how many cars they make - so lower levels of production will likely persist.

“Fewer cars rolling out of plants has helped to bump-up retail prices and carmakers, alongside retail networks, will want to hold on to the margin they’ve gained since the start of the pandemic.

“While production disruption will be hurting efficiency, a reduced volume focused on more profitable models will be an attractive balance that manufacturers won’t want to let go of. Over the short term, it’s helping to cover the costs of huge underutilised plants while they review options to right-size.

“Bigger price tags on forecourts could help to open a window for Chinese-owned carmakers in the UK, which may be more competitive on cost. At the Munich mobility show last month we saw this potential for a shake-up in the market, with an impressive exhibit of SUV, electric, autonomous and hydrogen models.”

ENDS

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About KPMG UK

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