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UK car production at lowest level in 25 years

UK car manufacturing output fell 5.0% in the worst September since 1995, as the industry issues a plea for a vital Brexit deal.

September’s UK car production registered the worst performance for the month in 25 years

Factories turned out 114,732 cars last month; a decline of some 6,000 units on the same month in 2019, according to the Society of Motor Manufacturers and Traders (SMMT), and due to the uncertain economic and political environment and Covid-related global market conditions.

Exports fell 9.7% in September to 87,533 units – some 9,500 fewer vehicles year-on-year. Shipments to key overseas destinations fell, including China, the EU and US, which were down 1.2%, 3.3% and 30.0% respectively.

Domestic production, however, actually climbed 14.5%, equivalent to a rise of 3,440 vehicles, largely as a result of new model introductions that were in run-out in the same month last year.

Year-to-date, 632,824 vehicles have been built; down 35.9% on the same period in 2019. According to the latest independent outlook forecasts, factories are on track to make fewer than 885,000 cars this year – the first time volumes will have dipped below one million since 2009.

One continuing area of positivity was production of the latest battery electric vehicles (BEVs), which grew 37.0% year-on-year. Of this, the “overwhelming” majority (76.6%) were exported, many of these into the EU – prompting the UK car sector to renew its calls for action to avoid the prospect of a ‘no-deal’ Brexit.

SMMT analysis has shown how a 10% World Trade Organisation (WTO) tariff would increase the cost of UK-made electric cars exported to the EU by an average £2,000 per vehicle.

UK car buyers would also suffer from a no-deal; the WTO tariff would bring an average hike of £1,900 per EU-built vehicle sold in the UK, while for fully electric cars, the cost increase rises to £2,800 – potentially stymieing the Government’s plans for Net Zero.

SMMT chief executive Mike Hawes said: “We need negotiators to agree a deal urgently, one that prioritises automotive, enhances innovation and supports the industry in addressing the global threat of climate change. With production already strained, the additional blow of ‘no deal’ would be devastating for the sector, its workers and their families.”

Charlie Jardine, founder and CEO at EO Charging, said it was encouraging to see EV production bucking the overall trend.

“As a provider of EV chargers and software across the UK and Europe, we’ve seen strong demand in recent months from big businesses looking to accelerate their fleet electrification plans. Our sense is that the pandemic has given corporates’ electrification plans a shot in the arm, which can only be good news for spurring on the growth of the whole EV industry and its supply chain,” he commented.

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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.

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