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February sees decline in UK car production

Posted on 11 Apr 2019 and read 1851 times
February sees decline in UK car productionUK car production fell by 15.3% in February (compared with February 2018), with 123,203 units manufactured, according to figures re-leased by the Society of Motor Manufacturers and Traders (SMMT).

Declining demand in the UK and in key European and Asian export markets resulted in output falling for the ninth consecutive month. Production for home and export markets dropped by 11.0% and 16.4% respectively.

In the first two months of 2019, overall output fell by 16.8% (compared with the first two months of 2018); and while home demand fell by 8.0%, most of the decline came from the fall in manufacturing for export, which was down by 18.9%.

Exports to China were down by 55.6%, while those to the USA were down 2.8%. Production for the EU — the UK’s biggest customer –— was down 14.9%.

Although exports have declined in recent months, overseas demand continues to drive output, still accounting for nearly eight in 10 cars produced — more than half destined for the EU.

Mike Hawes, SMMT chief executive (www.smmt.co.uk), said: “The ninth month of decline for UK car production should be a wake-up call for anyone who thinks this industry, already challenged by international trade hostilities, declining markets and technological disruption, could survive a ‘no deal’ Brexit without serious damage.

“Uncertainty has already paralysed investment, cost jobs and damaged our global reputation.”

UK engine manufacturing was also down, the 235,595 units built in February down 7.0% compared with February 2018.

There was a double-digit drop in production for the domestic market, with 79,172 units built compared with 96,002 in February 2018.

That said, the proportion of engines built for export grew — 66.4% compared with 62.1%.

In stark contrast, British commercial vehicle (CV) production increased by 53.5% in February to 9,233 vehicles, boosted by strong market incentives ahead of model changes.

The number of CVs manufactured for both domestic and export markets increased significantly, growing by 57.3% and 51.9% respectively.

Almost seven in 10 British CVs were destined for global markets in February, as demand from overseas continued to drive output.

Mr Hawes said: “While the positive news continues for UK CV manufacturing, it is important to highlight that this low-volume industry is cyclical and experiences large percentage swings when compared month on month.

"Although both demand at home and demand overseas have seen double-digit growth, still almost two thirds of British-built CVs are destined for export, the majority to the EU.

"This signifies just how vital free and frictionless trade with the EU is for this sector.”