UK car manufacturing falls for ninth month

UK car production for home and export markets both declined sharply last month, sparking fears of greater challenges for the industry if no-deal Brexit were to occur.

According to the latest data released on Thursday by the Society of Motor Manufacturers and Traders, total production of 123,203 units was generated, down 15.3% on the same month last year.

Production for home market fell 11.0% year-on-year, the ninth consecutive month of declines, while exports were also down 16.4% as key Asian and European markets experience declines.

For the two months of 2019, overall output has decreased 16.8% with home demand down 8.0% and the majority of the decline came from the fall in manufacturing for export, down by 18.9%.

Weakening demand in key markets continued to affect output, with exports to China down more than half (-55.6%) and cars destined for the US down 2.8%. Meanwhile, production for the EU – the UK’s biggest customer – declined by 14.9%.

The SMMT said that overseas demand still is the main driver of output, accounting for nearly eight in 10 cars produced and most destined for the EU. It calls for the assurance that the bloc will remain the UK’s main buyer by securing a free and frictionless trading relationship.

This could be harmed by the possibility of no-deal Brexit, which would harm productivity and competitiveness.

Mike Hawes, SMMT CEO, said, “The ninth months of decline for UK car production should be a wakeup call for anyone who thinks this industry, already challenged by international trade hostilities, declining markets and technological disruption, could survive a ‘no deal’ Brexit without serious damage. A managed no deal is a fantasy.

“Uncertainty has already paralysed investment, cost jobs and damaged our global reputation. Business anxiety has now reached fever pitch and we desperately need parliament to come together to restore stability so that we can start to rebuild investor confidence and get back to the business of delivering for the economy.”