UK car production declines further

28 November 2019

UK manufacturing is continuing its decline, as numbers from last month add to calls for a trade deal with the EU to benefit the market.

In October, output fell by 4% with 134,752 units rolling off production lines, according to figures from the Society of Motor Manufacturers and Traders (SMMT). This was 5,622 models fewer than in the same month last year.

′Global economic uncertainty and ongoing Brexit worries are impacting UK engine production, and with output down in all but two of the last 14 months, it’s a trend that’s deeply concerning,’ says SMMT’s chief executive Mike Hawes.

Car production in the country has now fallen for 16 of the last 17 months, with August 2019’s numbers artificially inflated by the movement in plant shutdowns to earlier this year, to cope with the perceived bottlenecks caused by the original Brexit deadline of 29 March.

Domestic trouble

Year-to-date, manufacturing is down by 14.4% to 1,123,926 units, with the majority (80.5%) heading abroad to destinations around the world, including the EU, US, China and Japan. With further plant shutdowns at the start of November, due to the latest missed Brexit deadline, it is unlikely that the eleventh month of the year will add any comfort to the spiralling figures.

′Yet another month of falling car production makes these extremely worrying times for the sector’

During the last month, production for the domestic market declined 10.7% as consumer and business confidence continued to wane, while overseas orders were down 2.6%, a result of soft demand in some key markets. Model changeovers also played a part in the downturn.

′Yet another month of falling car production makes these extremely worrying times for the sector,’ says Hawes. ′Our global competitiveness is under threat, and to safeguard it we need to work closely with the next government to ensure frictionless trade, free of tariffs, with regulatory alignment and continued access to talent in the future.

′This sector is export-led, already shipping cars to more than 160 countries, and in a period of unprecedented change a close trading relationship with the EU and preferential trading with all these other markets will be essential to keep automotive in Britain.’

Engine building

The manufacturing downturn has also hit engine production. Demand fell by 6.2% in October, hit by slowing orders from the international market. This has led to a year-to-date drop of 7.2% as UK plants slow their orders, driving the decline.

With more than six out of 10 engines produced in the country being shipped overseas, the SMMT highlights that it is crucial a ′free and frictionless’ trade deal with the EU is struck when the country leaves Europe, currently scheduled for 31 January 2020.