British car factories turned out 120,649 units in January, down 18.2% on January 2017 and marking the eighth successive month of decline, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). Demand dropped at home and overseas, but it was the latter that fell most, with exports down 21.4% to 93,781 units.

Further softening in key Asian and European markets drove much of the decline, with output destined for China down 72.3% and the EU27 20.0%. Manufacturing for the domestic market fell by 4.8%, as political uncertainty continued to dent consumer confidence.

Mike Hawes, SMMT chief executive (www.smmt.co.uk), said: “Another month of decline is a serious concern.

“The industry faces myriad challenges, from falling demand in key markets, to escalating global trade tensions and the need to stay at the forefront of future technology; but the clear and present danger remains the threat of a ‘no deal’ Brexit, which is monopolising time and resources, undermining competitiveness.”

Almost a third of automotive companies responding to a recent SMMT survey said they had postponed or cancelled UK investment decisions because of Brexit, with one in five having already lost business as a direct consequence.

Over half said that contingency plans were being executed, with some 12.4% relocating operations overseas and the same proportion reducing their UK head-count.

UK engine production also fell in January, to 241,727 units — a fall of 9.5% compared with January 2017; and the SMMT says the fact that six in 10 engines are exported highlights the importance of frictionless trade with overseas markets.

In stark contrast, UK commercial-vehicle manufacturing grew by 49.1% in January (compared with January 2017), with 9,182 vans, trucks, buses and coaches leaving production lines.

A number of large domestic orders and strong market incentives helped to deliver the sector’s best January performance for seven years.

Demand from both domestic and export markets saw double-digit increases, up by 97.4% and 25.3% respectively. A number of large fleet orders in the small-volume UK market resulted in the doubling of home output.

However, overseas demand continued to drive volumes, with almost six out of every 10 CVs built in the UK destined for international customers — the majority (96.2%) within the EU.