UK car production down 18.2%

January’s production figures may have delivered good news to the commercial vehicle segment, but UK car manufacturers had nothing to celebrate. The Society of Motor Manufacturers and Traders (SMMT) reports that production in British car factories declined 18.2 per cent to 120,649 units in January 2019, marking the eighth successive month of decline. Both domestic and overseas demand decreased but it was the latter that fell most, with exports down -21.4 per cent to 93,781 units.

The SMMT comments that further softening in key Asian and European markets drove much of the decline, with output destined for China down -72.3 per cent and the EU27 -20.0 per cent, while model changes also played a significant part. It adds that manufacturing for the domestic market also fell by -4.8 per cent as political uncertainty continued to dent consumer confidence.

“Another month of decline is a serious concern,” states Mike Hawes, SMMT chief executive. “The industry faces myriad challenges, from falling demand in key markets, to escalating global trade tensions and the need to stay at the forefront of future technology. But the clear and present danger remains the threat of a ‘no deal’ Brexit, which is monopolising time and resources, undermining competitiveness. Every day a ‘no deal’ Brexit remains a possibility is another day automotive companies pay the price in additional and potentially pointless costs. ‘No deal’ must be taken off the table immediately and permanently.”

Almost a third of automotive companies responding to a recent SMMT survey said they had postponed or cancelled UK investment decisions because of Brexit, with one in five having already lost business as a direct consequence. Over half said that contingency plans were being executed, with 12.4 per cent relocating operations overseas and the same proportion reducing UK headcount.

Source: SMMT