• UK car manufacturing falls in September, as output declines -4.1% to 153,224 units.
  • Domestic demand sees biggest losses, dropping -14.2% to 31,421, while exports decrease -1.1%.
  • YTD production down -2.2% for the first nine months, to 1,259,509 units.
UK car production is edging down

UK car production is edging down

UK car manufacturing fell in September, with year-on-year output declining -4.1%, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT). Some 6,500 fewer cars rolled off production lines than in the same month last year, with a total output of 153,224.

Production for export fell by -1.1% in line with slower growth across EU markets, but it was substantial double-digit losses in the home market which drove the overall decline. Domestic demand in the month dropped -14.2% to 31,421 units, contributing to an overall year-to-date production decrease of -2.2%.

Mike Hawes, SMMT Chief Executive, said, "With UK car manufacturing falling for a fifth month this year, it's clear that declining consumer and business confidence is affecting domestic demand and hence production volumes. Uncertainty regarding the national air quality plans also didn't help the domestic market for diesel cars, despite the fact that these new vehicles will face no extra charges or restrictions across the UK.

"Brexit is the greatest challenge of our times and yet we still don't have any clarity on what our future relationship with our biggest trading partner will look like, nor detail of the transitional deal being sought. Leaving the EU with no deal would be the worst outcome for our sector so we urge government to deliver on its commitments and safeguard the competitiveness of the industry."

Stuart Apperley, Director and Head of UK Automotive at Lloyds Bank Commercial Banking, said a big drop to output levels was unlikely, but he also sounded a note of caution for investment prospects in the UK due to ongoing Brexit uncertainties.

Apperley said: "Falling domestic demand is contributing to plateauing production levels, in addition to a degree of natural adjustment after such a strong year in 2016. However we're unlikely to see a dramatic drop in volumes, as the sector is somewhat insulated from the effects of a more reluctant UK consumer while exports remain relatively healthy. The UK is home to the production of a number of models that are selling well abroad, including specialist, high-end luxury vehicles. 

"The pervading sense of uncertainty surrounding Brexit negotiations is a real challenge for the industry. In a sector where technological change is moving at its fastest rate for decades, securing investment is important for plants to make sure they have the equipment and skills needed to manufacture future vehicles." 

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