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British car production could fall 30% under no-deal Brexit

A no-deal Brexit could see British car production plummet 30% on current levels – sending car output volumes back to levels last seen in the mid-eighties.

Jaguar manufacturing facility

In the event of a no-deal Brexit, UK car production output is forecast to fall around 30% on recent levels to 1.07 million units by 2021

Published in the latest independent production forecast from AutoAnalysis, the figures suggest output could hit just 1.07 million units by 2021 should Britain crash out of the EU and fall back on WTO rules.

However, assuming a positive result to the negotiations with a favourable deal and transition period maintaining the status quo, UK car production could be 1.36 million units in 2019, down from 1.52 million in 2018, but forecast to rise to 1.42 million by 2021.

The figures have been released by the Society of Motor Manufacturers and Traders (SMMT) alongside latest manufacturing stats that show British car production fell 14.4% in March to 126,195 units, marking the 10th consecutive month of decline.

Production for both home and overseas markets declined in double digits, down 18.1% and 13.4% respectively.

Continuing recent trends, soft demand in key Asian and European markets was a significant factor, coupled with model changes and shifting car segment preferences globally. However, although UK exports fell in March, they increased their share of overall production year-on-year to 78.7%, demonstrating the crucial importance of barrier-free trade.

Mike Hawes, SMMT chief executive, said: “Despite the extension, the Brexit clock is still ticking and a devastating ‘no deal’ remains a threat. This new period of limbo does not end the havoc for industry, with investment stopped and expensive factory shutdowns moved to avoid a Brexit deadline that has itself now moved. Just a few years ago, industry was on track to produce two million cars by 2020 – a target now impossible with Britain’s reputation as stable and attractive business environment undermined. All parties must find a compromise urgently so we can set about repairing the damage and diverting energy and investment to the technological challenges that will define the future of the global industry.”

Commenting on the manufacturing figures, Justin Benson, head of automotive at KPMG UK, said: “With sales down, production down and investment virtually non-existent, it’s a challenging time for UK automotive. For the industry to get back on the upward curve and improve inward investment sentiment in the UK, four things are needed: a conclusion on Brexit; continued focus on customer experience; close control of costs; and, renewed vigour for exports to increase the UK’s share of the global market.”

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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.