Car makers in no-deal alarm
CAR manufacturing suffered a 4 per cent drop in output last month, prompting fresh calls for the next Government to secure an ambitious trade deal and avoid a “devastating” blow to the sector.
October’s reverse was the 16th out of the past 17 months, with only August bucking the negative trend when production was artificially boosted by Brexit contingency shutdowns earlier in the year.
A total of 14,752 vehicles rolled off production lines, according to the Society of Motor Manufacturers and Traders.
Domestic demand fell 10.7 per cent as consumer and business confidence waned, while overseas orders, which make up about 80 per cent, were down 2.6 per cent.
Production so far this year is down
14.4 per cent at 1.12 million.
The society’s chief Mike Hawes said: “Yet another month of falling car production makes these extremely worrying times for the sector. Our global competitiveness is under threat and to safeguard it we need to work closely with the next government to ensure frictionless trade, free of tariffs, with regulatory alignment and continued access to talent in the future. This sector is export-led, already shipping cars to more than 160 countries, and in a period of unprecedented change a close trading relationship with the EU and preferential trading with all these other markets will be essential to keep automotive in Britain.”
Research for the society showed World Trade Organisation tariffs on imported components and exported vehicles would add more than £3.2billion a year to manufacturing costs, equivalent to nearly 90 per cent of the sector’s annual spending on research and development.
This would force prices to rise and global demand to shrink.
The cost in lost production is estimated at £42.7billion over the next five years as the impact of tariffs means about 1.5 million fewer cars are produced.
Hawes added: “Detailed trade negotiations will be complex and will take time but a close trading relationship is essential to unlock investment so we can deliver our goals: cleaner air, zero carbon emissions and the ability to go on building our products.”