UK production falls again in July

UK production falls again in July

29 August 2019

British car manufacturing output has declined again as the country continues to suffer from its economic uncertainties.

During July, the output from factories across the country dropped by 10.6%, according to figures released by the Society of Motor Manufacturers and Traders (SMMT). This marks the 14th consecutive month of decline as ongoing weakness in major EU and Asian markets coupled with some key model changes affected performance.

Production for export fell 14.6% in 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%, or just fewer than 2,000 units, following a steep 35.1% 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%. 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% since January, while production for the UK is down 13.5% year-to-date.

Brexit concerns

″Another month of decline for UK car manufacturing is a serious concern,' says SMMT chief executive Mike Hawes. ′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.″

The issue of Brexit is playing on the minds of many carmakers, although some may not actively voice their concerns, others are doing so in order to ensure the UK Government is aware of the issues the situation poses. PSA Group, for example, has warned over the future of its Ellesmere Port plant, should a no-deal Brexit occur.