UK car production fell by 15.3% in February, with 123,203 units manufactured, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT). Declining demand in the UK and in key European and Asian export markets resulted in output falling for the ninth consecutive month.
Production for home and export markets dropped year-on-year by 11.0% and 16.4% respectively. Year-to-date, overall output decreased 16.8%. While home demand fell 8.0%, the majority of the decline came from the fall in manufacturing for export, down by 18.9%. Weakening demand in key markets continued to affect output, with exports to China down more than half (-55.6%) and cars destined for the US down by 2.8%. Meanwhile, production for the EU – the UK’s biggest customer – declined by 14.9%.
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Although exports have declined in recent months, overseas demand continues to drive output, still accounting for nearly eight in 10 cars produced – more than half destined for the EU. This, the SMMT reiterated, underlines the importance of securing a ‘truly free and frictionless future trading relationship with our most important trading partner’. The SMMT said again that the UK motor industry has been unequivocal about the impact of no deal, which would have an immediate and potentially irreversible impact on cost, productivity and competitiveness.
The UK’s future trading arrangements with the EU remain uncertain, with the UK government’s negotiated EU withdrawal agreement still not ratified by the UK’s parliament and multiple scenarios still possible.
Mike Hawes, SMMT Chief Executive, said: “The ninth months of decline for UK car production should be a wake-up call for anyone who thinks this industry, already challenged by international trade hostilities, declining markets and technological disruption, could survive a ‘no deal’ Brexit without serious damage. A managed no deal is a fantasy.
“Uncertainty has already paralysed investment, cost jobs and damaged our global reputation. Business anxiety has now reached fever pitch and we desperately need parliament to come together to restore stability so that we can start to rebuild investor confidence and get back to the business of delivering for the economy.”
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By GlobalDataStuart Apperley, director and head of UK automotive at Lloyds Bank Commercial Banking, said: “The industry is doing all it can to mitigate a range of issues such as increasing diesel regulation, falling sales in China and the uncertainty created by carmakers moving future production out of the UK.
“Short-term planning and the timings of annual shutdowns have also proved challenging in light of the continued uncertainty around the UK’s future trade relationship with the EU.
“Toyota’s commitment to producing the new Suzuki hybrid in its Burnaston plant will be one of the few silver linings on another difficult month for the industry.”
