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UK car manufacturing falls on slow domestic demand

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Data reveals 151,795 vehicles were built in October, of these 122,765 were shipped to overseas customers (81%)

UK car manufacturing fell 1.0% in October, ending a 14-month run of growth for the industry, according to figures published by the Society of Motor Manufacturers and Traders.

The data revealed that 151,795 vehicles were built in October, of these 122,765 were shipped to overseas customers (81%), a 2% increase on the October 2015, and offsetting a 11% decline in production for the home market.

Despite the fall, domestic demand remains strong, with production in the year so far up 3% and at its highest level since 2005.

The SMMT said the UK motor industry remained strong, with production up by 9% so far this year, and more than 1.4 million vehicles produced.

Mike Hawes, SMMT chief executive, said: “October’s figures underline the export-led nature of the industry, with eight out of 10 cars built for overseas customers. Despite model changes which have ended the consistent growth pattern of the past year or so, we are still on track for a record number of exports.

“Given this dependence on global trade, it is crucial that British-built cars remain attractive to international buyers and exports are not subject to additional tariffs, costs and other barriers to successful trade. It is also essential government ensures there is economic stability and a competitive business environment to ensure we continue to attract the global investment that is behind this performance.”

UK commercial vehicle (CV) manufacturing increased by 17% in October, with 9,312 vehicles leaving production lines last month, according to the SMMT figures.

A huge increase in overseas demand fuelled the growth, with exports rising 87% to counterbalance a 46% decline in domestic production. Year-to-date figures show output for export remains ahead in 2016, up 12%, with more than half (56%) of UK-built CVs destined for overseas markets.

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