Brexit – UK Car Production Declines -10.6%. Exports Hit

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British car manufacturing output declined -10.6% in July, with 108,239 units produced, according to figures released by the Society of Motor Manufacturers and Traders (SMMT). This was the 14th successive month of decline as ongoing weakness in major EU and Asian markets coupled with some key model changes affected performance. Casting a pall over it all is the unresolved Brexit fiasco/crisis by the conservative government.

“Another month of decline for UK car manufacturing is a serious concern,” said Mike Hawes, SMMT Chief Executive. “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.”

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Production for export fell -14.6% in the month, although overseas demand remained the main driver of overall volumes, accounting for 8 in 10 cars built. Meanwhile, output for the domestic market rose by 10.2%, or just fewer than 2,000 units, following a steep -35.1% fall in July last year, when multiple factors, including preparation for WLTP affected output. (WLTP How Does It Work? Will it Work?)

During  the year-to-date, some 774,760 cars have been made in Britain, 180,864 fewer than in the same timeframe last year and representing a fall of -18.9%. With exports accounting for the vast majority of orders, their decline is primarily responsible for the overall fall in output with overseas shipments down -20.2% since January, while year-on-year production for the UK is down -13.5%.

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About SMMT and the UK Automotive Industry

The Society of Motor Manufacturers and Traders (SMMT) is one of the largest trade associations in the UK. It supports the interests of the UK automotive industry at home and abroad, promoting a united position to government, stakeholders and the media.

The automotive industry is a vital part of the UK economy accounting for £82 billion in sales and £18.6 billion value added. With some 168,000 people employed directly in manufacturing and 823,000 across the wider automotive industry, it accounts for 14.4% of total UK export of goods and invests £3.75 billion each year in automotive R&D. More than 30 manufacturers build some 70 models of vehicle in the UK supported by 2,500 component providers and skilled engineers.