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British car manufacturing plummets 20% as Brexit uncertainty bites

The UK car industry has reiterated the devastating impact of a ‘no-deal’ Brexit scenario as manufacturing continues to suffer serious declines.

The UK's car manufacturing industry

UK car production fell 19.6% in November

Figures released today by the Society of Motor Manufacturers and Traders (SMMT) show production fell by a substantial 19.6% in November, continuing recent trends.

While home production fell by 1.9% in the month, exports experienced a steeper 22.8% drop – falling for the fifth month in a row. Just over 105,000 cars were exported to global markets in November, still representing some eight in every 10 cars leaving British factories.

Year-to-date output dropped 8.2% to around 1.4 million cars, with export volumes down 75,085 units and output for the domestic market down 54,143.

Announcing the figures, the SMMT continued to highlight how a no-deal Brexit would have an immediate and devastating impact on the industry, halting production, undermining competitiveness and causing irreversible and severe damage.

According to the BBC, a government minister has warned that businesses that trade with the EU need to take steps now to prepare for the possibility of a no-deal Brexit.

But ongoing research by the SMMT has shown the catastrophic effects of such a scenario, with three-quarters of carmakers in the UK saying in latest analysis that a ‘no-deal’ Brexit would hit their business, impacting on profitability and future investment. The SMMT’s work has also indicated that import tariffs alone could push up the list price of cars imported to the UK from the continent by an average of £1,500 if brands and their retail networks were unable to absorb these additional costs.

And latest research by LMC has found that a no-deal Brexit could cost the UK automobile market some £9bn in annual revenue while making it hard for carmakers to justify having UK plants.

SMMT chief executive Mike Hawes said: “As UK motor companies are being told to prepare for a ‘No Deal’ Brexit, the long-standing fears of the industry are becoming a reality. Brexit is already having an impact – in output, costs and jobs. But this does not compare with the catastrophic consequences of leaving the EU without a deal. The Just-in-Time nature of automotive means the impact of ‘No Deal’ will be felt, not in months or days, but hours.

“There is no such thing as a ‘managed’ ‘no deal’. We would face immediate delivery shortages, additional costs and uncertainty, which will seriously damage our sector. Both government and parliament have a responsibility to take this option off the table or risk destroying this vital UK industry.”

For more of the latest industry news, click here.

Natalie Middleton

Natalie has worked as a fleet journalist for 16 years, previously as assistant editor on the former Company Car magazine before joining Fleet World in 2006. Prior to this, she worked on a range of B2B titles, including Insurance Age and Insurance Day. As Business Editor, Natalie ensures the group websites and newsletters are updated with the latest news.