Car production in UK sees drop of 10.6% in July
CAR production in the UK fell by 10.6% in July and investment in the automotive industry has “effectively stopped”, a new report has warned.
Figures from the Society of Motor Manufacturers and Traders (SMMT) showed a 14th month of decline in a row, longer than the 13-month slump at the height of the 2008/9 financial crash.
SMMT also warned that car manufacturers had spent at least £330m on planning for a bad Brexit outcome, tieing up money that would have been used for investment in stockpiling, training for new customs procedures and securing new warehouses and other logistics solutions.
A number of factors around the world have been affecting the automotive industry, including a drop of sales in both China and the US, plus a decline in people wanting diesel cars after recent emissions scandals.
But with the UK automotive industry now reliant on exports to Europe to the greatest extent in three years, industry leaders said the new statistics showed an acute need for a Brexit deal that would maintain the UK’s competitiveness and boost investment.
SMMT chief executive Mike
Hawes said: “Another month of decline for UK car manufacturing is a serious concern.
“The sector is overwhelmingly reliant on exports and the global headwinds are strong, with escalating trade tensions, softening demand and significant technological change.
“With the UK market also weak, the importance of maintaining the UK’s global competitiveness has never been more important so we need a Brexit deal – and quickly – to unlock investment and safeguard the long-term future of a sector which has recently been such an international success story.”
A total of 108,239 cars were manufactured in Britain in July, down from 121,051 in the same month last year.g
Production for export dropped by 14.6% from last July, although overseas demand was the major driver of manufacturing, accounting for 80% of cars built, the SMMT said.
Output for the domestic market rose by 10.2%, contrasting with a sharp drop of 35.1% recorded in July last year.
The July data follows the release of earlier figures showing that car production fell 20.1% in the UK in the first half of the year, compared with the first half of 2018.
A number of UK car manufacturers have scaled back production this year, with Nissan cancelling production of two of its models at its Sunderland plant, Ford, with its engine plant in Bridgend and Honda in Swindon announcing that they will be shutting factories entirely and Vauxhall owner PSA warning that it will only keep producing the Astra in the UK if there is a good Brexit deal.
SMMT warned that a number of manufacturers had brought forward annual shutdowns to April to coincide with what was then planned to be the UK’s time of departure from the EU, and would not be able to do the same again.
They also pointed to a huge slump in investment in car plants, with £90m spent in the first six months of the year compared to an average annual figure of £2.7bn for the past seven years.
SMMT said the automotive industry supported 168,000 jobs in the UK, many of them well-paying, and contributed £18.6bn to the national economy each year.