Decline in UK car production

UK car production declined in March, with demand falling -13.3% year on year, according to figures released by the Society of Motor Manufacturers and Traders (SMMT).

147,471 cars were built in British factories as the domestic market continued to slow, with demand falling -17.7%. Exports also declined, down -11.9% due to fluctuations in demand in some global markets.

Overall output in the first quarter of 2018 fell -6.3 per cent, with 440,426 cars leaving production lines in total this year. Almost 80% of these were exported, and while demand from overseas customers fell -4.0 per cent in Q1, this was dwarfed by the -14.1% decline in manufacturing for the UK market.

Britain’s vehicle and component manufacturers are important contributors to the UK economy and are responsible for 13.0% of all the country’s export in goods. For every £1 generated by the industry, £3 are delivered to the economy via adjacent sectors such as logistics, retail and finance, with SMMT calculations putting the total economic impact at £219b – 10% of UK GDP.

Mike Hawes, SMMT chief executive, said, ‘A double digit decline in car manufacturing for both home and overseas markets is of considerable concern. Following recent announcements on jobs cutbacks in the sector, it’s vitally important that the industry and consumers receive greater certainty, both about future policies towards diesel and other low emission technologies, and our post-Brexit trading relationships and customs arrangements.’

Alex Buttle, director of Motorway.co.uk, also commented on the recent figures, ‘In anyone’s books that’s a worrying trend, even when you take into account that domestic demand was particularly strong in the first quarter of 2017. The industry is facing a crisis. It has been hit with several knockout blows and is struggling to climb off the canvas, with Brexit only likely to worsen the situation.’