'Perfect storm' of factors hit UK car production in June

A “perfect storm” of factors including operational changes and preparation for new technology caused a 47.2% drop in domestic car production in the UK in June, the Society of Motor Manufacturers and Traders (SMMT) has said.

Despite the fall for the domestic market, exports – which account for more than eight in 10 cars produced in the UK – grew 6% year-on-year, meaning an overall drop of 5.5%.

The SMMT called June an “anomaly” in the first half of 2018, which saw a manufacturing drop of 3.3%. Model cycles, operational changes and preparation for next-generation vehicle technology ahead of new nitrogen oxide- and particulate-targeting emissions standards were all blamed.  

“June’s results demonstrate the risks of judging automotive performance one month in isolation, with numerous and varied factors creating a perfect storm for home market output,” said SMMT chief executive Mike Hawes. “Looking at the longer-term picture, the sector is performing as expected in the context of market conditions at home and abroad.”

The society nevertheless called on negotiators on both sides of the Brexit talks to back “free and frictionless” trade to safeguard the industry, both for the UK and the EU. The bloc is the largest importer of UK cars, accounting for 53.4% of vehicles produced for export. Germany, Italy and France are the UK’s second, third and fourth biggest markets after the US and ahead of China. 

Almost nine in 10 cars registered by British buyers in the first six months of 2018 were imported, with 69.1% coming from the EU.

“First-half figures are a reminder of the exports-led nature of UK automotive, the integrated EU supply chain and our mutual dependency on free and frictionless trade,” said Hawes. “The UK government’s latest Brexit proposals are a step in the right direction to safeguard future growth, jobs and consumer choice – not just in Britain but right across Europe.

"We now look to negotiators on both sides to recognise the needs of the whole European automotive industry, which combined employs more than 12m people. Any disruption risks undermining one of our most valuable shared economic assets.”