UK car production shows signs of improvement but uncertainty still reigns
UK car manufacturing fell 20.8% in July to 85,696 units; a significantly smaller fall than the last three months but still showing the impact of the pandemic on the sector.
While production continued to ramp up last month, as lockdown measures eased and nearly all factories reopened, both social distancing considerations and the ongoing economic uncertainty took their toll. Exports were down 16.8% while domestic production tumbled by a dramatic 37.1% year-on-year.
The overall 20.8% decline follows a near 43% drop in June and a warning by the Society of Motor Manufacturers and Traders (SMMT) that this was a taste of things to come.
An updated independent production outlook published last month has predicted that just over 880,000 cars will be produced in the UK this year – some 32% lower than made in 2019 and 30% less than anticipated in January pre-crisis. It would bring production to its lowest total since 1957.
The latest production figures would seem to back this. The current year-to-date total shows manufacturing for the first seven months of 2020 tumbled 39.7% to 467,053 units; a loss of 307,707 units compared to July 2019.
With concerns rising over a lack of progress in Brexit negotiations and what the Prime Minister’s game plan actually is, the SMMT reiterated its longstanding call for the UK to swerve a no-deal disaster.
Mike Hawes, SMMT chief executive, said: “As key global markets continue to re-open and UK car plants gradually get back to business, these figures are a marked improvement on the previous three months, but the outlook remains deeply uncertain. With the sector now battling economic recession as well as a global pandemic, it has neither the time nor capacity to deal with the further shock of a ‘no-deal’ Brexit.
“The impact of tariffs on the sector and the hundreds of thousands of livelihoods it supports would be devastating, so we need negotiators on both sides to pull out all of the stops to ensure a comprehensive free trade deal is agreed and in place before the end of 2020.”