UK car output falls as industry targets FTA

Posted on 13 Feb 2020 and read 558 times
UK car output falls as industry targets FTAUK car production fell by 14.2% in 2019 (compared to 2018) to 1,303,135 units, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT), with a 6.4% drop in December (compared to December 2018) rounding off a third year of decline.

Output was affected by multiple factors, including weakened consumer and business confidence at home, slower demand in key overseas markets, a number of significant model production changes and a shift from diesel across Europe.

Factory shutdowns in the spring and autumn, timed to mitigate disruption arising from the anticipated departure of the UK from the EU on 29 March and 31 October, also had a marked effect.

Manufacturing for domestic car buyers fell by 12.3%, to 247,138 units, while exports also took a hit, down 14.7%, although overseas orders accounted for more than eight in 10 cars built and totalled over one million units; and while shipments to the ‘EU27’ fell by 11.1%, the bloc remains the sector’s most important market with its share of exports rising by two percentage points to 54.8%.

Meanwhile, trade with the UK’s next largest markets, the USA (representing 18.9% of export volumes), China (5.3%)
and Japan (3.2%) also fell, with exports down 9.8%, 26.4% and 17.7% respectively.

That said, the UK’s ‘renowned ’small-volume car manufacturing sector bucked the trend, with growing demand for some of the world’s most iconic and desirable brands boosting output by 16.2% in the year.

Meanwhile, production of alternatively fuelled cars rose by 34.7% to 192,304 units.

Mike Hawes, SMMT chief executive (www.smmt.co.uk), said: “The fall of UK car manufacturing to its lowest level in almost a decade is of grave concern.

Every country in the world wants a successful automotive sector, as it is a driver of trade, productivity and jobs.

"Given the uncertainty the sector has experienced, it is essential to re-establish our global competitiveness, and that starts with an ambitious free-trade agreement (FTA) with Europe — one that guarantees all automotive products can be bought and sold without tariffs or additional burdens.

"This will boost manufacturing, avoid costly price rises and maintain choice for UK consumers. Negotiations will be challenging, but all sides stand to gain, and this sector is up for it.”


Meanwhile, UK commercial-vehicle manufacturing declined by 7.8% in 2019, with 78,270 units leaving production lines; output for the domestic market fell by 7.0% in the year, while exports dropped by 8.4% to 46,110 units.

Almost six out of every 10 vans, trucks, taxis and buses built in the UK in 2019 were exported, with 94.6% of them going to the EU.

It was also a sorry picture for UK engine manufacturing, down 7.2% in 2019 to 2.5 million units. More than six in 10 UK-built engines head overseas.

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