UK manufacturing falls again as Brexit continues to bite

31 October 2019 Car production in the UK has fallen again, as fluctuations caused by Brexit shutdowns remain likely to impact the market. According to the latest SMMT figures, output in September fell by 3.8% with 122,256 units rolling out of factories around the country, almost 5,000 fewer than the same period last year. Notwithstanding August, where a rise was only due to a shift in annual shutdowns, the drop marks a continued horror story for the industry with a 15-month period of decline. Market woes In September 2019, production for the UK declined 5.1% as political and economic uncertainty combined to dampen the domestic market. Exports fell 3.4% as cooling demand in key global and European markets affected overseas orders. Output in the year-to-date, meanwhile, is down 15.6%, marking the weakest first three quarters since 2011 and illustrating the impact of the multiple challenges currently facing UK Automotive. In addition to the technological challenges and escalating trade tensions facing the global industry, businesses in the UK are having to divert huge resources to preparing for the possibility of a ′no deal’ Brexit, which remains a threat. British automotive manufacturers have already spent more than £500 million (€581 million) on measures to mitigate leaving the EU without a deal, while essential investment in new products and facilities has to be put on hold or even cancelled due to the uncertainty and fear of a ′no deal’ Brexit. August bounce UK car production rose 3.3% year-on-year in August as the industry started to catch up with itself after several closures were initiated earlier in the year. The country saw its first rise in production in 15 months. However, it was due mainly to a number of plants remaining open during a month that traditionally sees shutdowns for maintenance purposes. Several plants brought forward these plans to April ahead of the UK’s original Brexit deadline at the end of March. With Brexit delayed even further and some carmakers announcing additional shutdowns in the first weeks of November, it is likely that manufacturing in the UK will drop even more by the end of the year. Threat remains ′Another bitterly disappointing month reflects domestic and international market contraction,’ SMMT chief executive Mike Hawes says. ′Most worrying of all though is the continued threat of a ′no deal’ Brexit, something which has caused international investment to stall and cost UK operations hundreds of millions of pounds, money that would have better been spent in meeting the technological challenges facing the global industry. ′A general election may ultimately provide some certainty, but does not yet remove the spectre of no-deal which will continue to inhibit the UK industry’s prospects unless we can agree and implement a new, ambitious and permanent relationship that safeguards free and frictionless trade.’