UK car production was down 3.8% to 122,256 units in the month of September, rounding off what the SMMT described as a turbulent first nine months for sector.
Year-to-date output is down 15.6% as political and economic turmoil, softness in key global markets and operational changes impact output. The SMMT said that made it the weakest first three quarters since 2011.
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The UK's automotive sector – through the SMMT trade body – called again for end to uncIf you thereertainty and an ambitious future relationship between the UK and EU based on tariff-free and frictionless trade.
The latest figures mark a 15-month period of decline for the sector, notwithstanding August when several key plants kept production lines running after moving the traditional annual shutdown period to April to guard against disruption from the original 29 March Brexit date.
In September 2019, production for the UK declined 5.1% as political and economic uncertainty combined to dampen the domestic market. Exports fell 3.4% as cooling demand in key global and European markets affected overseas orders
In addition to the technological challenges and escalating trade tensions facing the global industry, businesses in the UK are having to divert huge resources to preparing for the possibility of a 'no deal' Brexit, which still remains a threat, SMMT says. British automotive manufacturers have already spent more than GBP500m on measures to mitigate leaving the EU without a deal, while essential investment in new products and facilities is having to be put on hold or even cancelled due to the uncertainty and fear of a 'no deal' Brexit.
Mike Hawes, SMMT Chief Executive, said: "Another bitterly disappointing month reflects domestic and international market contraction. Most worrying of all though is the continued threat of a 'no deal' Brexit, something which has caused international investment to stall and cost UK operations hundreds of millions of pounds, money that would have better been spent in meeting the technological challenges facing the global industry. A general election may ultimately provide some certainty, but does not yet remove the spectre of no deal which will continue to inhibit the UK industry's prospects unless we can agree and implement a new, ambitious and permanent relationship that safeguards free and frictionless trade."
Stuart Apperley, director and head of UK automotive at Lloyds Bank Commercial Banking, said: "A dip in production marks a return to the norm for the sector after the respite provided by August's increase. For manufacturers it's still the case that their wider outlook remains far from clear.
"JLR's recent return to profit, owing to a pick-up in Chinese sales, offers a reason for optimism to other manufacturers who will look to replicate this success. Despite this, it's worth remembering that overall sales in the country are down and its wider economic volatility has been cited by some carmakers as a reason for their recent, below-expected earnings.
"Manufacturers also face other pressures, not least the uncertainty surrounding the UK's future trading relationships and tightening emissions targets across Europe and beyond. While a no deal Brexit – something the industry has repeatedly spoken out against – appears to be off the table for now, more clarity and reassurance is still needed."
