Declining exports push UK car production down

British car manufacturing output declined 10.6 per cent in July, with 108,239 units produced. This was the 14th successive month of decline. According to the Society of Motor Manufacturers and Traders (SMMT), production was affected in July as ongoing weakness in major EU and Asian markets coupled with some key model changes affected performance.

Production for export fell 14.6 per cent during the month, although overseas demand remained the main driver of overall volumes, accounting for eight in ten cars built. Meanwhile, output for the domestic market rose by 10.2 per cent, or just fewer than 2,000 units, following a steep 35.1 per cent fall in July last year, when multiple factors, including preparation for WLTP, affected output.

In the year-to-date, some 774,760 cars have been made in Britain, 180,864 fewer than in the same timeframe last year and representing a fall of 18.9 per cent. With exports accounting for the vast majority of orders, their decline is primarily responsible for the overall fall in output with overseas shipments down 20.2 per cent since January, while year-on-year production for the UK is down 13.5 per cent.

“Another month of decline for UK car manufacturing is a serious concern,” states Mike Hawes, SMMT chief executive. “The sector is overwhelmingly reliant on exports and the global headwinds are strong, with escalating trade tensions, softening demand and significant technological change. With the UK market also weak, the importance of maintaining the UK’s global competitiveness has never been more important so we need a Brexit deal – and quickly – to unlock investment and safeguard the long-term future of a sector which has recently been such an international success story.”