Joe Finnerty

Rise in car production is positive, but the Brexit effect still looms on the horizon

BRITAIN’S car manufacturers are churning out new models at a record pace, with more than a million new cars produced in the first seven months of 2016, according to latest figures from the Society of Motor Manufacturers and Traders (SMMT).

Production levels have risen by 40 per cent in the last six years; the last time output surged past a million cars before August was in 2004.

July’s output was up for the 12th consecutive month, with 125,566 cars built, taking the total to 1,023,723 for the year. Although July saw domestic demand up by 14 per cent, the majority of cars built in 2016 have been sold abroad. Nearly four out of five cars built in Britain are now exported.

It’s great news for the economy and the automotive industry as a whole, as it continues to go from strength to strength. Some commentators have even suggested that July’s figures – the first full month since the Brexit vote – show it isn’t hitting the economy as was feared. But that’s simply not true.

Whatever your view on Brexit, one thing’s for sure – the implications won’t be seen for many months yet. Manufacturers’ investments and purchasing decisions for cars built in June and July were made more than a year ago, so it’ll be mid-2017 before the real decisions can be judged.

Plus, exports should continue to be strong as the weaker pound means it’s more financially lucrative for foreign buyers. Add in the fact nothing has actually changed yet in terms of trade deals, and it’s far too early to say.

We have to just hope the strong position the automotive industry is currently in can handle any negative impacts in the future.

“Whatever your view on Brexit, one thing’s for sure – the implications won’t be seen for months”