UK car production falls for fifth month running

UK car manufacturing fell 9.8% in October, marking the fifth consecutive month of decline as Brexit and declining consumer confidence continued to hit hard.

More than half of carmakers with UK operations said contingency plans are now being executed for a no-deal Brexit

The data from the Society of Motor Manufacturers and Traders (SMMT) shows a total of 140,374 cars left production lines last month, 15,255 fewer units compared with the same month a year ago.

Demand was down for both the home market and overseas, with falls of 12.1% and 9.3% respectively, but exports continued to account for the lion’s share of output, taking 82.7% of all cars produced.

Year-to-date output remains down, falling 6.9%, with some 1.3 million units produced in the first 10 months.

Commenting on the figures, SMMT chief executive Mike Hawes renewed the organisation’s calls for a Brexit deal that sets out free and frictionless trade, saying: “The fifth consecutive month of decline for UK car manufacturing is undoubtedly concerning and, while a number of factors have been at play, there is no doubt that business and consumer uncertainty is having a significant impact. With eight in 10 British-built cars destined for overseas markets, the majority to the EU, the sector’s dependence on exports cannot be downplayed. Europe is our largest trading partner and securing the right Brexit agreement which allows free and frictionless trade is vital for the future health of our industry.”

Earlier this week, the SMMT published research showing three-quarters of carmakers in the UK say a ‘no-deal’ Brexit would hit their business, impacting on profitability and future investment in the UK. Almost seven in 10 (68.5%) said their profitability would be negatively affected if there were no Brexit deal, with 53.9% concerned about their ability to secure new overseas business and a similar number worried about maintaining investment in their UK operations.

Justin Benson, head of automotive at KPMG UK, also outlined the need to sort a Brexit deal. He commented: “Voting the deal through could release pent-up demand and we could see a levelling out or rise in demand for cars. On the other hand, a no-deal scenario would not only reduce consumer confidence further, it will make the UK automotive sector highly uncompetitive in a global market where over 80% of UK output is for export.”

 

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.