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Highlights
- British automotive manufacturing industry experienced drop in output for the eight consecutive months.
- The fall in production was driven by global semiconductor shortages and permanent shutdown of Honda’s Swindon plant.
- According to latest figures from SSMT, around 61,657 cars were manufactured in the UK in February 2022.
British automotive manufacturing industry experienced a drop in the output for the eight consecutive months, with the car production fell by 41% in February as global semiconductor shortages and permanent shutdown of Honda’s Swindon plant have a continued impact, the Society of Motor Manufacturers and Traders (SMMT) said on Friday.
According to the latest figures by SMMT, around 61,657 cars were manufactured in the UK last month, representing the weakest performance in the last 13 years, down by 43,351 cars as compared to the same month a year earlier.
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SMMT revealed that the industry has dedicated around £10.8 billion to electric vehicle production and gigafactories since 2011 to bring innovative technology to the market.
The industry entered the new year with hopes of recovery after car output sank to the lowest since 1956 last year and was half its level of five years ago. However, the global chip shortage causing some factories to pause production and the ongoing geopolitical war between Russia and Ukraine is likely to pose more challenges for the automotive manufacturing industry in the UK, as it has pushed the commodity prices, such as aluminium, nickel, and palladium that are used as raw material by the industry, to its record highs and further added to the supply chain crisis.
Although, last year Russia took just 1.1% of the UK car export and Ukraine just 0.5%, both the countries are important exporters of critical raw materials, parts, and components that are used by car manufacturers.
Production of electrified vehicles continued apace in February, with hybrids, plug-in hybrids and battery-electric cars together represented 25.8% or 15,905 units of total output.
2022 Kalkine Media®
Let us look at three stocks, Saietta Group Plc, TI Fluid Systems Plc and Aston Martin Lagonda Global Holdings, which investors may buy or hold depending on their research.
Saietta Group Plc (LON:SED)
Saietta is a global engineering company, engaged in designing and manufacturing of complete powertrains for electric vehicles (EVs). It has developed innovative, patent protected, Axial Flux Technology (AFT) electric motor designed for highly efficient EV drivetrains.
The company is listed on the FTSE AIM All-Share Index with a market cap of £133.95 million as of 24 March 2022 and since the start of the year the company hasn’t performed well, as its Year-to-Date (YTD) return stands at -38.67%. Saietta’s shares closed trading at GBX 157.50 on 24 March 2022.
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TI Fluid Systems Plc (LON: TIFS)
TI Fluid Systems is a leading multinational developer and manufacturer of fluid storage, carrying and delivery systems for light vehicles. The company has reported an increase in revenue by 4.9% to €2,956.6 million in FY2021, from €2,814.5 million FY2020. Its operating profit increased to €126.8 million, from the loss of €176.3 million in FY2020, driven by recovering revenues and the non-repeat of the prior year’s exceptional impairment charge.
The company is listed on the FTSE 250 Index with a market-cap of £1,009.32 million as of 24 March 2022 and since the start of the year, the company hasn’t performed well, as its Year-to-Date (YTD) return stands at -22.83%. TI Fluid Systems’s shares closed trading at GBX 196.00, up by 1.03%, on 24 March 2022.
Aston Martin Lagonda Global Holdings Plc (LON: AML)
Aston Martin Lagonda Global Holdings is a UK-based independent luxury cars designer and manufacturer that operates in over 160 locations across 53 countries. The luxury car manufacturer reported an increase in revenue by 79% to £1,095.3 million in FY2021, from £611.8 million in FY2020. However, the company reported loss before tax of £213.8 million, down from £466.0 million in FY2020.
The company is listed on the FTSE 250 Index with a market cap of £1,056.05 million as of 24 March 2022 and since the start of the year, the company hasn’t performed well, as its Year-to-Date (YTD) return stands at -32.28%. Aston Martin Lagonda Global Holdings Plc’s shares closed trading at GBX 906.80, down by 1.15%, on 24 March 2022.
Also Read: National Grid, SSE: Are these energy supplier stocks worth investing in?
Note: The above content constitutes a very preliminary observation or view based on market trends and is of limited scope without any in-depth fundamental valuation or technical analysis. Any interest in stocks or sectors should be thoroughly evaluated taking into consideration the associated risks.
