The day before the UK leaves the EU, the Society of Motor Manufacturers and Traders (SMMT) voiced fears about the potential state of the sector after Brexit. According to new SMMT figures, the industry built 1.3m cars last year – a fall of 14.2%.
Weakened consumer and business confidence, slower demand in ‘key’ overseas markets, a number of significant model production changes and a shift from diesel across Europe were all partly responsible, the organisation said.
Factory shutdowns in the spring and autumn, timed to mitigate expected disruption from the anticipated departure of the UK from the EU on 29 March and 31 October, also reportedly had a marked effect.
Manufacturing for domestic car buyers fell 12.3% to 247,138 units, while exports were down -14.7%. Overseas orders nonetheless continued to drive volumes, accounting for more than eight in 10 cars built and totalling over 1m units. Shipments to the EU fell by 11.1%, but its share of exports rose 2% to 54.8%. Trade with the UK’s next largest markets, the US (18.9% of export volumes), China (5.3%) and Japan (3.2%) also fell, with exports down -9.8%, -26.4% and -17.7% respectively.
“The fall of UK car manufacturing to its lowest level in almost a decade is of grave concern,” said SMMT chief executive Mike Hawes. “Every country in the world wants a successful automotive sector as it is a driver of trade, productivity and jobs.
“Given the uncertainty the sector has experienced, it is essential we re-establish our global competitiveness and that starts with an ambitious free trade agreement with Europe, one that guarantees all automotive products can be bought and sold without tariffs or additional burdens. This will boost manufacturing, avoid costly price rises and maintain choice for UK consumers. Negotiations will be challenging but all sides stand to gain and this sector is up for it.”
Despite the sector’s woes, it was a good year for alternatively-fuelled and small-volume car output, with production up 34.7% and 16.2% respectively. The UK is well-placed to lead ultra-low and zero emission vehicle development and manufacturing thanks to engineering excellence, expertise in advanced powertrain technologies, light-weighting and aerodynamics, the SMMT said – if the right business conditions are in place.
One in 14 people (168,000) employed in manufacturing nationwide works in automotive, with an additional 279,000 jobs supported. In regions such as the North East and West Midlands, automotive accounts for more than one in six manufacturing jobs.
The latest independent production outlook downgrades expectations for 2020 to 1.27m cars, down from 1.32m forecast in November. Negotiations on the future UK-EU relationship – and trade deals with the rest of the world – must move quickly and to “arrest” the decline and ensure future competitiveness, the SMMT said.
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