UK car production was down 44.5% in April as pre-planned factory shutdowns to mitigate the uncertainty of an end-March UK exit from the EU took effect.
Just 70,971 cars rolled off production lines in the month of April and manufacturing for domestic and overseas markets fell 43.7% and 44.7% respectively as most volume manufacturers brought forward, and extended, production stoppages normally scheduled for the summer holiday period.
The SMMT said the shift in shutdown, which cannot now be repeated for a new 31 October Brexit deadline, was part of a raft of costly and ongoing contingency measures, including stockpiling, rationalisation, training for new customs procedures and rerouting of logistics – all designed to try to protect business when the UK leaves the customs union and single market.
April was the 11th straight month of car output decline in Britain, an underlying trend that is put down largely to slowing demand in key international markets, including the EU, China and the US, as well as at home.
In the year to date, 127,240 fewer cars have been built compared with the same period in 2018 – a decline of more than a fifth – with similarly large percentage falls in production for the UK and export.
The SMMT said that ‘provided the UK leaves the EU with a favourable deal and substantial transition period, and notwithstanding any escalation of global trade tensions, the decline in volumes is expected to ease by the end of the year, as new models come on stream and production lines remain active over the usual summer shutdown months’. However, it also said that the latest independent outlook suggests output for the year will still be down some 10.5% on 2018 levels and warned that a ‘no deal’ Brexit could exacerbate the decline, with the threat of border delays, production stoppages and additional costs compromising competitiveness.
Mike Hawes, SMMT Chief Executive, said: “Today’s figures are evidence of the vast cost and upheaval Brexit uncertainty has already wrought on UK automotive manufacturing businesses and workers. Prolonged instability has done untold damage, with the fear of ‘no deal’ holding back progress, causing investment to stall, jobs to be lost and undermining our global reputation. This is why ‘no deal’ must be taken off the table immediately and permanently, so industry can get back to the business of delivering for the economy and keeping the UK at the forefront of the global technology race.”
Justin Benson, Head of Automotive at KPMG UK described the April figures as ‘alarming’ and warned that the ‘Brexit limbo needs to stop’. He said: “April’s car production figures, which highlight a steep fall, are alarming for the automotive industry. The Brexit limbo needs to stop, as the sector requires certainty and clarity about the kind of Brexit deal that will be implemented. Whilst a significant fall in production was expected and planned for – in anticipation of the UK’s potential departure from the EU on 29 March – these sorts of figures cannot be repeated in October without serious implications for the sector’s output.
“The key concern is the effect on Britain’s competitiveness and reputation, considering around 80% of cars produced in the UK are exported. We are already seeing German and other EU countries moving their orders for manufactured goods from the UK to companies in other EU countries in readiness for Brexit, so damage is already being done. I can’t stress enough that the automotive industry needs stability, and it needs it now.”