British car manufacturing output declined by 10.6% in July, with 108,239 units produced, according to figures released by the Society of Motor Manufacturers and Traders (SMMT). This was the 14th successive month of decline as ongoing weakness in major EU and Asian markets coupled with some key model changes affected performance.
Production for export fell 14.6% in the month, although overseas demand remained the main driver of overall volumes, accounting for 8 in 10 cars built. Meanwhile, output for the domestic market rose by 10.2%, or just fewer than 2,000 units, following a steep -35.1% fall in July last year, when multiple factors, including preparation for WLTP affected output.
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In the year-to-date, some 774,760 cars have been made in Britain, 180,864 fewer than in the same period last year and representing a fall of 18.9%. With exports accounting for the vast majority of orders, their decline is primarily responsible for the overall fall in output with overseas shipments down 20.2% since January, while year-on-year production for the UK is down 13.5%.
Mike Hawes, SMMT Chief Executive, said: “Another month of decline for UK car manufacturing is a serious concern. The sector is overwhelmingly reliant on exports and the global headwinds are strong, with escalating trade tensions, softening demand and significant technological change. With the UK market also weak, the importance of maintaining the UK’s global competitiveness has never been more important so we need a Brexit deal – and quickly – to unlock investment and safeguard the long term future of a sector which has recently been such an international success story.”
Stuart Apperley, director and head of UK automotive at Lloyds Bank Commercial Banking, noted the challenges facing the UK’s automotive sector. He said: “A 14th straight month of production declines once again underlines the automotive industry’s challenges.
“Alongside the ongoing issue of the UK’s changing trading relationships, concerns exist around slowing global growth which is affecting the economies of some of our key export markets such as France, Germany and China.
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By GlobalData“Ultimately, we’re still seeing little appetite to invest to increase production capacity or to adopt new technologies. While this is somewhat understandable for now, it could hamper productivity and competitiveness further down the line.
“The latest new registration figures also show that while overall vehicle sales continue to decline, demand for electric vehicles is growing. With this in mind, investment in new tech would be a logical place for manufacturers to deploy their available cash.”
See also: UK auto industry’s structure ‘not sustainable’ under no-deal Brexit
