UK car production falls 20% in first six months

Posted on 15 Aug 2019 and read 915 times
UK car production falls 20% in first six months British car manufacturing output fell by more than a fifth in the first half of 2019, with a 15.2% decline in June (compared with June 2018) marking the 13th consecutive month of ‘negative growth’.

According to figures released by the Society of Motor Manufacturers and Traders (SMMT), 666,521 cars rolled off production lines in the first six months, a year-on-year loss of 168,052 units — due largely to falling demand in key markets (including the UK) but exacerbated by factory shutdowns that were brought forward from the summer in anticipation of the March Brexit deadline.

In June, output for the UK rose by 2,791 units, following an anomalous 47.2% decline in June 2018, when preparation for the new WLTP emissions test impacted output.

The underlying trend, however, remains downward, with production for the domestic market in the first six months of 2019 down 16.4%.

The number of cars built for export fell by 19.8% in June and by 21.0% in the first six months of the year, with just over half a million units shipped overseas.

Exports to the sector’s top global markets saw the USA down 12.9%, China down 53.1%, Japan down 10.5% and Turkey down 93.0%.

Demand in the UK’s biggest market — the EU — fell by15.6%.

However, the EU still accounts for 57% of all UK car exports — the highest ‘first-half dependence’ since 2016.

SMMT ( research shows that inward investment in the sector “effectively stopped in the first half of the year”, with newly pledged investment down more than 70% to just £90 million, contrasting with the average annual investment figure of £2.7 billion over the previous seven years.

SMMT chief executive Mike Hawes said: “These figures are the result of global instability compounded by on-going fear of a ‘no deal’ Brexit . . . Automotive manufacturing is one of the UK’s most important economic assets, delivering an annual £18.6 billion to the economy and employing 168,000 people in high-value jobs (some 40% higher than the national average).

"The sector is also one of the UK’s most productive, with automotive output per job now worth some £100,900.

Automotive remains the UK’s single biggest exporter of goods, trading with some 160 countries world-wide and accounting for more than 14% of total exports.”

Meanwhile, UK commercial-vehicle (CV) production fell by 57.2% in June (compared with June 2018), with manufacturing for both the home and overseas markets falling by 44.7% and 65.4% respectively; 3,345 vans, trucks and buses left production lines, as key model changeovers continued to impact output.

British engine manufacturing also suffered; it was down 10.8% in first half of 2019 to 1.3 million units. Demand from home and international markets was down 16.9% and 7.0% respectively.

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