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March 27, 2020

UK car production steady in February

UK car output was steady in February (with a decline of just 0.8% versus last year), but the month precedes the period when the COVID-19 crisis hit and manufacturers suspended production. The data for the month of March will inevitably see a big decline to UK car output.

By Sam Duke

UK car output was steady in February (with a decline of just 0.8% versus last year), but the month precedes the period when the COVID-19 crisis hit and manufacturers suspended production. The data for the month of March will inevitably see a big decline to UK car output.

However, some 122,171 cars rolled off production lines in February, representing a loss of just over 1,000 units compared with February 2019. The slight decline was driven by slower demand in some key global export markets.

In the month before the coronavirus pandemic started to be felt in the UK, export shipments fell by 3.1% to just short of 95,000 units. Although combined EU demand rallied (up +3.6%), exports to the US and Asia fell substantially. Meanwhile, there was positive news for the domestic market, where output rose by 7.8%, with 27,172 cars produced. Year-to-date figures show a 1.5% year-on-year drop in overall production.

The figures come at a time of unprecedented challenge for the UK and its automotive industry, with all car manufacturing plants now on shutdown as the country focuses efforts on overcoming the crisis.

An initial assessment commissioned by SMMT of the potential impact of these shutdowns suggests a loss of around 200,000 units by the end of 2020, just under 1.1 million units – a fall of 18%. However, the impact could be far more severe if the crisis, and therefore shutdowns, were to last for months instead of weeks, the SMMT noted.

Mike Hawes, SMMT Chief Executive, said: "Despite the myriad global challenges the UK automotive industry has faced in recent times, it remains fundamentally strong and February's figures reflect that. However, these figures also reflect the calm before the storm. With UK car plants now effectively on national shutdown and many global markets closed, the outlook is of deep concern. We wholeheartedly welcome government's extraordinary package of emergency support for businesses and workers, but this must get through to businesses now.

"If we're to keep this sector alive and in a position to help Britain get back on its feet, we urgently need funding to be released, additional measures to ease pressure on cashflow and clarity on how employment support measures will work."

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