UK car production screeches to five-year low

British car production slumped to a five-year low in 2018 after Brexit fears halved new investment in the industry and left two thirds of the UK's global car trade "at risk", according to industry data released on Thursday

Figures from the Society of Motor Manufacturers and Traders showed just over 1.5m new cars rolled out of UK factories last year, a decline of 9.1%.

New investment in the industry dropped by 46.5% to £588.6m amid caution about the UK's post-Brexit trading prospects with the European Union.

The other 27 EU countries continued to account for the vast majority of UK exports, receiving 52.6% of exported vehicles, though exports to the US grew by 5.3% and vehicles bound for Japan and South Korea rose by 26.0% and 23.5% respectively.

Japan and Korea, along with other key markets such as Canada and Turkey, are or will soon be subject to preferential EU trade agreements.

On the back of the data, UK car manufacturers urged the government to avoid a 'no deal' Brexit scenario at all costs.

Mike Hawes, SMMT chief executive, said: "UK Automotive is on red alert. Brexit uncertainty has already done enormous damage to output, investment and jobs. Yet this is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the EU but with the many other global markets with which we currently trade freely."

Hawes added that challenges to the sector are "immense" and urged all parties involved in negotiations to "save us from 'no deal'".

Meanwhile, production for the UK fell by 16.3% as regulatory changes and ongoing uncertainty over future diesel policy and taxation were exacerbated by declining consumer and business confidence, with registrations of British-built cars in the UK down 20.9%.

Unite assistant general secretary Steve Turner said: "The UK’s government is lurching from one failed policy to another as it seeks to unite itself rather than our nations. This ‘toxic cocktail’ of failed economic and political policy has resulted in a collapse of consumer and corporate confidence and thousands of skilled jobs haemorrhaging from car plants and the wider supply chain."

Turner added that the industry had been harmed by a lack of government investment in UK based electric and hydrogen vehicle technologies as well its "failure to secure a Brexit deal which secures frictionless trade".