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November 19, 2015

UK car manufacturing turned down in October

UK car manufacturing turned down in October. However, it is ahead in the first ten months and the SMMT data shows the cumulative total is 2.8% ahead of last year.

UK car manufacturing turned down in October. However, it is ahead in the first ten months and the SMMT data shows the cumulative total is 2.8% ahead of last year.

The SMMT said the small monthly decline reflected model changes.

A total of 1,318,452 new cars rolled off UK production lines in the first 10 months of the year, the best performance since 2005 and up 2.8% year-to-date. Exports drove volumes in October, with foreign demand up 1.5%, while the domestic market fell marginally month-on-month.

Mike Hawes, SMMT Chief Executive, said: "Despite a small drop in overall output last month, the industry has delivered a robust performance so far this year, particularly in terms of exports. Given the slowdown we've seen in several key global markets in recent months, UK automotive manufacturing still remains in a strong position."

John Leech, head of automotive at KPMG UK, put the downturn in October down to new models and some weakness in key export markets. He said: "While today's car manufacturing figures show production hitting the highest year-to-date level in a decade, the overall output fell slightly in October compared to the same month last year. The reasons for this drop are twofold: the seasonal cooling down as a number of UK plants prepare for new models, such as the new Vauxhall Astra being launched at Ellesmere Port later this month; and weakness in demand in the Chinese and Russian markets.

"However, this is a blip, rather than a trend. Undoubtedly 2016 will see more cars made in the UK than in the previous decade, and I forecast that car production will continue to grow in future years, peaking at 2 million in 2020 to beat the all-time production record." 

More than 1.5m cars were built in the UK in 2014. UK vehicle production is also heavily export-focused, with over 78% of production exported in 2014, a significant proportion of which went to Europe.

A recent report issued by the SMMT said that annual car production in the UK is forecast to hit a new record of two million units by 2020.

Car manufacturing Oct-14 Oct-15 % Change YTD-14 YTD-15 % Change
Total 150,060 148,976 -0.7% 1,282,080 1,318,452 2.8%
Home 33,895 31,078 -8.3% 281,791 309,076 9.7%
Export 116,165 117,898 1.5% 1,000,289 1,009,376 0.9%
% export 77.4% 79.1% 78.0% 76.6%

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