UK car manufacturing down for 12th month running
UK car production fell for the 12th month in a row in May – with output already down 21.0% for the year to date.
The figures – published by the SMMT just days after it warned that hard Brexit border delays could cost UK auto sector £50k a minute – show that output dropped 15.5% in May, with 21,239 fewer units manufactured in the month. Domestic demand fell by 25.9% while overseas orders were down 12.6% – with exports accounting for eight in every 10 cars made.
The figures for the first five months of the year paint a graver picture – the 21.0% decline saw almost 150,000 fewer cars roll off production lines compared with the same point in 2018, with the total standing at 557,295 new models. This is due, to a certain extent, to the decision by some manufacturers to bring forward summer shutdowns to April in anticipation of the expected March date for the UK to leave the EU.
Mike Hawes, SMMT chief executive, said: “12 consecutive months of decline for UK car manufacturing is a serious concern and underlines yet again the importance of securing a Brexit deal quickly. The sector is facing multiple seismic challenges simultaneously: technological, environmental and economic. The ongoing political instability and uncertainty over our future overseas trade relationships, most notably with Europe, is not helping and, whilst the industry’s fundamentals remain strong, a brighter future is only possible if we secure a deal that can help us regain our reputation as an attractive location for automotive investment. No deal is not an option.”
The latest figures bring added weight to the NatWest UK Automotive PMI report published at the start of this week, which found the UK automotive sector is facing a “range of distinct headwinds”.
According to the report, the headline seasonally adjusted UK Automobiles & Auto Parts PMI – a single-figure measure of developments in manufacturing conditions – registered at 43.5 in May; putting it below the crucial 50.0 no-change threshold for the second month running. The latest figure was down from 48.9 in April and signalled the sharpest downturn in business conditions across the UK automotive sector for six-and-a-half years.
In response, Richard Hill, head of automotive & manufacturing, NatWest, said the industry “must accelerate efforts to collaborate across the critical elements of the auto sector ecosystem – OEMs, supply chain, policymakers, investment and finance communities”.
He added: “The coming global shift towards electric powertrains is opening up huge rewards for value creation across the supply chain, while the technologies underpinning the future of mobility may create new geographic hubs for industrial innovation.”
And Ian Isaac, managing director, Lombard, also called for manufacturers to embrace a hopefully imminent switch to electric vehicles by drivers.
“Our front-line feedback is that as the electric vehicle becomes more commonplace, and the young people of today become the vehicle purchasers of tomorrow, British manufacturers must ensure they are best placed to capitalise on the opportunity,” he said.