Car production in the UK declined in March as the industry felt the effects of weaker demand in Europe.

Data from the SMMT showed that UK car manufacturing fell 6.3% in March to 126,909 units. In the first quarter car production declined by 2% to 393,416 units.

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The production of cars for export in March was down by 8.2% to 98,818 units, while production for the UK market posted a small gain of 1.5% to 28,091 units.

“Car output fell 2% in Q1 2013 as UK vehicle manufacturers continue to grapple with weak demand in Europe,” said Mike Baunton, SMMT Interim Chief Executive. 

“Other factors such as extended facility holidays during the Easter period may have also impacted production volumes in March, during which output declined 6%. Despite ongoing difficult market conditions, UK automotive manufacturing is expected to grow overall in 2013 and beyond, fuelled by significant investment from global automotive companies.”

Despite the weak start to the year, the SMMT said that strong investment intentions suggest production will rise over the full year and beyond.

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John Leech, UK Head of Automotive at KPMG said: “With new cars sales falling off a cliff in Germany, France and Italy, it is not a surprise that the UK’s volume car plants have taken the opportunity to extend Easter shutdowns.  At the moment, with continental car markets in freefall, it is hard to predict how long UK car production will be impacted.  Of course we are faring much better than our European neighbours, since the UK is relatively insulated to falling Eurozone demand because our premium car plants such as JLR and Mini export to fast-growing emerging markets. 

“In addition, UK vehicle plants will launch new models in 2013, such as the Range Rover Sport, which should see production recovering towards the end of the year. Our medium-term forecast remains positive, with UK vehicle production set to grow from about 1.5m to 1.9m in 2016 based on manufacturers’ latest plans.”