Pingdemic hinders car production bounceback

The car industry has warned today that the so-called pingdemic, along with supply shortages, is undermining the “bounceback” of the British automotive sector, and says that it would welcome an earlier relaxation of the rules on self-isolation.

The Society of Motor Manufacturers and Traders (SMMT) reports “anecdotal” evidence from UK component-makers suggesting that absentee rates after being “pinged” by the NHS Covid app are running as high as 30 per cent, and at 5 per cent or more among the main manufacturers.

Nissan, the owner of Britain’s largest car plant in Sunderland, has already voiced concerns about how the situation is affecting its staff and the threat it poses to production and exports.

A multi-skilled, flexible workforce can cope with a certain amount of problems; the issue is whether the “pingdemic” – or indeed a stronger third wave of Covid – could set back an already modest recovery.

Mike Hawes, chief executive of the SMMT, said bringing forward the date when self-isolation is no longer automatically required for the vaccinated – currently pencilled in as 16 August – “would help”, adding that “the government is aware of our concerns” and that the date “should be brought forward if possible”.

In a subdued presentation, the SMMT voiced fears that the industry is still “in the eye of the storm” and that a global shortage of semiconductors, which has already affected smartphones and other domestic electronics, is also holding back the recovery – which is not as rigorous as industry chiefs had hoped.

There is an average of 1,500 chips controlling the engine and other functions of the average new car, and disruption to their supply would render a car unusable.

The car industry, in normal times, accounts for about 15 per cent of semiconductor production worldwide.

The UK auto sector has lost about 300,000 cars, or £8.5bn in value.

Overall, UK factories turned out 498,923 cars in the first half of the year, some 40 per cent down on the pre-pandemic five-year average, with the great bulk of the output (80 per cent or so) for export, and with the EU as the largest single market.

Good news on inward investment and electric vehicles at Nissan in Sunderland, at Stellantis/Vauxhall at Ellesmere Port and at Geely/Lotus in Norfolk helped offset the impending closure of the Honda plant at Swindon.

Production is expected to end at about 1 million units in 2021, down significantly on past years.

Mr Hawes made a plea for support from ministers: “Businesses have ensured their facilities are Covid secure, but urgent action is needed, such as bringing forward the 16 August target date for exempting fully vaccinated adults from self-isolation and introducing a ‘test to release’ scheme to support those employees not yet fully vaccinated.

“Operating conditions are still challenging, however, highlighting the need for specific actions to help competitiveness, such as creating a ‘Build Back Better’ fund and the alleviation of high energy costs, to get the sector back on track and towards the volumes that make UK facilities viable.”

SMMT recommendations for policy include the establishment by the government of a fund to help the manufacturing sector recover, the construction of gigafactories with 60 GWh of capacity, and the installation of 2.3 million public charge points for battery-powered electric vehicles.