‘A wake up call’: car production plummets as EU demand falls

The number of cars built in the UK in February dropped 15.3% year-on-year, the ninth consecutive month of decline.

The figures are a “wake up call” for those who think the industry could survive a ‘no deal’ Brexit, said the Society of Motor Manufacturers and Traders (SMMT), which released the statistics. It blamed the reduced output on declining demand in the UK, as well as in “key European and Asian export markets”.

Production for the domestic market fell 11% year-on-year, with 8% lower demand. The export market – which accounts for nearly eight in every 10 cars built, more than half of those for the EU – was responsible for most of the decline, however. Production for export plummeted 16.4%, with 18.9% lower demand.

The SMMT said the figures, and reliance on the EU for a large portion of exports, “underlines the importance of securing a truly free and frictionless future trading relationship with our most important trading partner. The 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.”

Production for the EU, the UK’s biggest customer, declined by 14.9%. Exports to China fell 55.6%, while 2.8% fewer cars went to the US.

The figures were released at midnight, shortly after MPs voted against eight separate proposals for a route forward on Brexit. SMMT chief executive Mike Hawes said: “The ninth month 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.”