September UK car manufacturing goes into reverse amid Brexit uncertainty

UK car manufacturing fell in September, with year-on-year output declining -4.1 per cent, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT). 6,500 fewer cars rolled off production lines than in the same month last year, with a total output of 153,224.

Production for export fell by -1.1 per cent in line with slower growth across EU markets, but it was substantial double-digit losses in the home market which drove the overall decline. Domestic demand in the month dropped -14.2 per cent to 31,421 units, contributing to an overall year-to-date production decrease of -2.2 per cent.

Mike Hawes, SMMT chief executive, said: “With UK car manufacturing falling for a fifth month this year, it’s clear that declining consumer and business confidence is affecting domestic demand and hence production volumes. Uncertainty regarding the national air quality plans also didn’t help the domestic market for diesel cars, despite the fact that these new vehicles will face no extra charges or restrictions across the UK.

“Brexit is the greatest challenge of our times and yet we still don’t have any clarity on what our future relationship with our biggest trading partner will look like, nor detail of the transitional deal being sought. Leaving the EU with no deal would be the worst outcome for our sector so we urge government to deliver on its commitments and safeguard the competitiveness of the industry.”

Justin Benson, head of automotive at KPMG UK, observerd: “The decline of UK car exports is concerning given the recent buoyant economic indicators from EU markets and around the world.

“With real wages reducing, consumers are considering their major purchases more carefully and as a result, domestic demand fell by over 14 per cent in one month. Businesses, on the other hand, are waiting to see the results of the Brexit negotiations before committing to major investments. Looking ahead, more clarity on what Brexit means for the industry would be extremely helpful, and sooner rather than later.”