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UK car production declined in July

Posted on 11 Sep 2019 and read 1004 times
UK car production declined in July British car manufacturing output fell by 10.6% in July (compared with July 2018), with 108,239 units produced, according to figures released by the Society of Motor Manufacturers and Traders (SMMT - www.smmt.co.uk).

This was the 14th successive month of decline, as on-going weakness in major EU and Asian markets — coupled with some key model changes — affected performance.

Production for export fell by 14.6%, although overseas demand remained the main driver of overall volumes, accounting for eight in 10 cars built.

Meanwhile, output for the domestic market rose by 10.2% (equating to fewer than 2,000 units), albeit following a steep fall of 35.1% in July 2018, when multiple factors — including preparation for WLTP — affected output.

In the first seven months of 2019, some 774,760 cars were made in Britain, 180,864 fewer than in the first seven months of 2018, representing a fall of 18.9%; and 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.

Year-on-year production for the UK was down 13.5%.

Mike Hawes, SMMT chief executive, said: “Another month of decline for UK car manufacturing is a serious concern.

“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, 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 that has recently been such an international success story.”

Meanwhile, British commercial-vehicle (CV) production fell by 31.2% in July (compared with July 2018) — the fourth successive month of negative growth.

Production for the home and overseas markets fell by 16.8% and 39.8% respectively, as model changeovers continued to affect factory output.

Just over 5,000 commercial vehicles rolled off production lines in July, some 2,290 fewer than in July 2018, with the fall driven primarily by the reduction in exports.

In the year to date, despite a 6.5% increase in production for domestic buyers, overseas demand has driven output; and with orders down by nearly 10,000 units, it means that year-on-year overall volumes fell by 18.1% in the first seven months of 2019.

Mr Hawes said: “The relatively small volumes involved in UK commercial-vehicle manufacturing make it particularly susceptible to model changes and fluctuating fleet cycles.

“However, for the sector to take advantage of the currently buoyant domestic van market and grow overseas orders, which still account for the majority of production, we need to maintain competitive trading conditions to encourage future investment.”

It was a better picture for UK engine production, which was up 0.6% in July, with 196,142 units produced. Home demand was down 4.0%, but export orders rose by 4.0%.

Almost two thirds of all output in the first seven months of 2019 was shipped overseas.