The latest UK car production data shows that buoyant exports kept the industry total up in September, in spite of a decline in output for the domestic market of over 10%.
The gain to exports comes as the auto industry reacts to the recent significant decline of the pound versus major currencies – which makes UK exports cheaper, but increases the costs of imported parts and raw materials. Since the June EU referendum vote sterling has dropped over 20% against the dollar and around 15% versus the euro.
UK car manufacturing volume increased by 0.9% in September with 159,726 vehicles produced.
SMMT data shows that exports rose 5.0% in September to reach 123,119 units, offsetting a -10.6% decline in production for the home market.
Overall year-to-date output increased 10.5% to 1,292,453 units, as production for global markets grew for a 14th consecutive month. Export demand rose by 10.5% to take volumes past one million in the first three quarters for the first time on record.
Mike Hawes, SMMT Chief Executive, said: "British-built cars are in demand across the world as demonstrated by the double digit growth in exports this year, resulting in more than a million cars produced for international markets. The vast majority of cars manufactured here in the UK are destined for abroad and future growth will depend on securing our international competitiveness and the barrier-free access to major global markets that has enabled UK Automotive to thrive."
Stuart Apperley, Director and Head of UK Automotive at Lloyds Bank Commercial Banking, welcomed buoyant exports but voiced caution on the outlook.
"New car sales to consumers are beginning to flatten out in the UK and the US, however our manufacturing base will remain healthy while other export markets continue to perform well.
"But there is an increasing sense of caution from the industry. The automotive sector plans three to four years in advance, and uncertainty around the UK's future relationship with the EU remains. Over the past few weeks we've seen senior figures in the industry seek assurances from the Government. The current currency impact has also seen some manufacturers raising prices.
"Attracting overseas investment is important if the sector is to continue on its successful trajectory. However, in the current environment, there is still uncertainty around securing transplant investment. The problem with this in the longer-term is that automotive technology is moving at its fastest pace in decades, making investment critical if facilities are to remain future-fit."