Car production slumped by almost a tenth last year, leaving the industry on ‘red alert’ amid continued uncertainty over Brexit, a new report reveals.

A nine per cent decline in outputs is the biggest slump since the recession in 2008-09 as fears mount for the 850,000 UK jobs in the automotive industry.

Assembly of diesel cars in total was down 22 per cent, with troubled Jaguar Land Rover hit hardest by plummeting demand for oil burners. 

Investment by car companies halved in 2018 to £588million a firms held off making decisions about a production future in Britain until trading arrangements between the UK and other countries become clearer.

'Red alert': UK car production fell by 9.1% in 2018, new figures released by the SMMT have confirmed

'Red alert': UK car production fell by 9.1% in 2018, new figures released by the SMMT have confirmed

‘Red alert’: UK car production fell by 9.1% in 2018, new figures released by the SMMT have confirmed

Announcing the official figures, the Society of Motor Manufacturers and Traders said investment had effectively ‘stalled’ amid fears over the UK’s future trading prospects with the EU.

Just over 1.5million cars left UK factories in 2018, a 9.1 per cent decline on the previous year, and the lowest for six years.

But while the motor industry representative heavily pointed the finger at car makers’ unwillingness to commit to the UK in the face of Brexit, the slump in diesel demand took a huge toll on UK factories. 

This took the most significant toll on the nation’s biggest car maker, Jaguar Land Rover, which has been forced to cut thousands of jobs at British plants in recent months.

Production of JLR vehicles – of which the majority it sells are diesel powered cars – was down 15.6 per cent, with nearly 450,000 models built in 2018 compared to more than 530,000 a year previous.

The car maker recently confirmed it had shelved plans to build a luxury two-door version of the Range Rover, called the SV Coupe, amidst its ongoing difficulties.

The premium 4×4, of which 999 were scheduled to be made and each costing £240,000 had already been presented to the public at the 2018 Geneva Motor Show, but has been culled in order for the brand to focus ‘resources and investment on the next generation of world-class products’, it said.

JLR production was down 15.6%. Only Vauxhall posted a more bigger year-on-year fall in outputs

JLR production was down 15.6%. Only Vauxhall posted a more bigger year-on-year fall in outputs

JLR production was down 15.6%. Only Vauxhall posted a more bigger year-on-year fall in outputs

The SMMT also pointed out that the fall in production volumes was likely to have been hit by the introduction stricter emissions rules in September that disrupted supply and a slowdown in China, the world’s largest automotive market. 

As a result, Nissan, Toyota and Vauxhall also posted significant declines.

The UK’s second largest car maker, Nissan, saw production fall by 10.7 per cent.

That’s despite the Sunderland factory – the biggest in the UK – building two of the most popular SUVs on sale, the Qashqai and Juke.

The Nissan Qashqai is the best-selling model produced in the UK

The Nissan Qashqai is the best-selling model produced in the UK

The Nissan Qashqai is the best-selling model produced in the UK

It also assembles the electric Leaf, which should have benefited from the consumer shift away from diesel vehicles. 

Toyota was also down by 10 per cent, though production of the next-generation Corolla from 2019 is expected to give the brand a significant boost.

Worryingly, Vauxhall, which produces the Astra family hatchback in Ellesmere Port, was down by almost 16 per cent.

Parent company PSA is already said to mulling over the decision to retain the UK production facility, which will see staffing fall to just 850 people by the end of 2019 after a series of job cuts. 

But it wasn’t all doom and gloom for UK car builders.

Mini posted an increase in production of seven per cent at its Oxford plant while exclusive brands with smaller outputs are also expected to announce increased figures on the previous year.  

The SMMT estimates that output is expected to fall another three per cent this year based on Britain leaving the EU with a deal followed by a transitional period.

SMMT chief executive Mike Hawes said the fall in investment was `deeply depressing´

SMMT chief executive Mike Hawes said the fall in investment was `deeply depressing´

SMMT chief executive Mike Hawes said the fall in investment was `deeply depressing´

Mini managed to buck the trend with a 7% increase in production

Mini managed to buck the trend with a 7% increase in production

Mini managed to buck the trend with a 7% increase in production

Mike Hawes, SMMT chief executive, said the fall in investment by manufacturers was ‘deeply depressing’ and should send a strong signal to politicians to secure a Brexit trade deal.

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He said: ‘With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK Automotive is on red alert.

‘Brexit uncertainty has already done enormous damage to output, investment and jobs. 

‘Yet this is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the EU but with the many other global markets with which we currently trade freely.

‘Given the global headwinds, the challenges to the sector are immense. Brexit is the clear and present danger and, with thousands of jobs on the line, we urge all parties to do whatever it takes to save us from ‘no deal’.’

Nissan's Sunderland plant - the largest of all vehicle-making factories in the UK - also posted a decline in outputs of 10.7% in 2018

Nissan's Sunderland plant - the largest of all vehicle-making factories in the UK - also posted a decline in outputs of 10.7% in 2018

Nissan’s Sunderland plant – the largest of all vehicle-making factories in the UK – also posted a decline in outputs of 10.7% in 2018

The decline if production of 9.1% is the fastest rate since the recession in 2008-09

The decline if production of 9.1% is the fastest rate since the recession in 2008-09

The decline if production of 9.1% is the fastest rate since the recession in 2008-09

The official figures showed that car production for the UK fell by 16 per cent last year.

However, with eight in 10 vehicles built in the UK made for overseas markets, it was the 7.3 per cent decline in production for export that worried the SMMT most.

Demand from European nations was down 9.6 per cent and 24 per cent in China.

However, exports to Japan increased by 26 per cent and by 23 per cent to South Korea, but the SMMT pointed out that both countries were subject to preferential EU trade agreements.

Exports to the US also increased by 5.3 per cent, leaving it the UK’s second biggest customer after the EU.

With more than 8 in 10 cars built in the UK destined for markets overseas, a 7.3% decline in export demand is a big concern for the industry

With more than 8 in 10 cars built in the UK destined for markets overseas, a 7.3% decline in export demand is a big concern for the industry

With more than 8 in 10 cars built in the UK destined for markets overseas, a 7.3% decline in export demand is a big concern for the industry

Hawes said the automotive industry was on 'red alert' with the likelihood of the UK crashing out of Europe without a deal looking more real

Hawes said the automotive industry was on 'red alert' with the likelihood of the UK crashing out of Europe without a deal looking more real

Hawes said the automotive industry was on ‘red alert’ with the likelihood of the UK crashing out of Europe without a deal looking more real

Mr Hawes said despite the Commons vote on Tuesday evening ‘nothing has changed’, leaving car-makers not knowing what the UK’s future trading relationship will be after the end of March.

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He added it was ‘fantasy’ to believe the car industry could manage a no-deal, warning it would be a ‘catastrophe’.

‘Investors are asking what is going on, what is going to happen next. That is the definition of uncertainty.’

A Department for Business, Energy & Industrial Strategy spokesman said: ‘As we leave the European Union we will seek the broadest and deepest possible agreement that delivers the maximum possible benefits for both the UK and EU economies and maintains the strength of our world-leading automotive sector.

‘The automotive industry is a great UK success story, one we are working to grow through our modern Industrial Strategy, Automotive Sector Deal and research funding including millions for the creation of next generation batteries.’ 

Some 1,519,440 cars rolled off UK production lines in the UK in 2018. That's over 150,000 fewer than the year previous

Some 1,519,440 cars rolled off UK production lines in the UK in 2018. That's over 150,000 fewer than the year previous

Some 1,519,440 cars rolled off UK production lines in the UK in 2018. That’s over 150,000 fewer than the year previous

Stuart Apperley said slowing sales in China, Europe and the UK were arguably a bigger threat to the car industry than Brexit

Stuart Apperley said slowing sales in China, Europe and the UK were arguably a bigger threat to the car industry than Brexit

Stuart Apperley said slowing sales in China, Europe and the UK were arguably a bigger threat to the car industry than Brexit

Stuart Apperley, director and head of UK automotive at Lloyds Bank Commercial Banking, said the figures showed that UK car makers are facing ‘a number of strong headwinds’ heading into 2019.

‘Many depend on frictionless trade, and manufacturers will fear anything that disrupts that, but slowing sales in China, Europe and the UK are arguably a more immediate threat,’ he said.

‘The potential for US tariffs on imports of European cars could also have a detrimental impact on those UK firms that make models and parts for the US market.

‘Without strong sales of their existing models, carmakers will find it difficult to invest in the technology that will one day power electric and autonomous vehicles. 

‘With governments around the world stalling on giving strong backing for diesel in particular, consumers and businesses are parking their investment decisions too.

‘While some of the headwinds carmakers are facing are cyclical, manufacturers would certainly welcome a little certainty about either their future trading relationships or the future of diesel.’ 

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