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UK car manufacturing continues to decline in August

By Mark Salisbury
Thursday, September 27, 2018 - 09:51

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SMMT

UK car production declined for a third consecutive month in August, according to figures released today by the Society of Motor Manufacturers and Traders (SMMT). 89,254 units left production lines as a multitude of factors, including model changes, planned maintenance shutdowns and preparation for September’s important new emissions standards, combined to slow output.

Production for the UK fell by -38.8% to 16,271 units. However, the number of cars built for export remained at a high level, with volumes down by just -3.8% to 72,983 units, accounting for 81.8% of total production.

In the year to date, more than one million cars have rolled off British production lines, a -5.2% decline year-on-year, with exports continuing to shore up demand. While almost 850,000 cars were shipped abroad in the first eight months, just 194,887 were built for the home market, representing an -18.6% decline on the same period in 2017.

Mike Hawes, SMMT Chief Executive, said, “The quieter summer months are often subject to fluctuations due to the variable timing and duration of annual maintenance and re-tooling shutdowns. This instability was exacerbated in August, with the industry racing to recertify entire model ranges to meet tougher testing standards in force on September 1. With exports, the majority to the EU, continuing to drive demand, it underscores the importance of a Brexit agreement to safeguard this trade; for our sector, ‘no deal’ is not an option.”

 

 

Commenting on the recent announcement of a fall in UK car production for a third month in a row, Julie Palmer, partner at Begbies Traynor, says:

“This news comes as no surprise, with a perfect storm of political and technological factors affecting this critical UK industry. The SMMT have been vocal about the impact of a “no deal” Brexit scenario and it is clear that manufacturers are deeply worried about a potential cliff face from next March. This allied with the drive away from diesel and the mayhem caused by the new WLTP tests are all taking their toll with a string of manufacturers recently announced three day working weeks. For manufacturers, such as JLR, that have previously focused much of their European production on diesel engines, the growth in negative public sentiment towards derv have caught them on the hop. The luxury end of the market is currently being propped up by major demand from non European markets, which is why Aston Martin was able to get the wheels in motion for an IPO in the summer.

Unfortunately I believe the pain in this sector is likely to get worse before it gets better if fundamental issues are not addressed sooner rather than later”

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