finance

UK car production falls 14% as sales slide


British car production fell by 14 per cent in March, the 10th straight month of declining output, due to sliding demand both at home and internationally.

Falling car sales in China and across Europe saw export production, which accounts for four out of five cars made in the UK, drop by 13.4 per cent to 99,322 vehicles in the month compared with the same period in 2018, according to figures from the Society of Motor Manufacturers and Traders.

The number of cars made for the domestic market, which is also in decline, dropped by 18.1 per cent to 26,873.

Total production over the first quarter, which is typically the strongest for car making, fell by 16 per cent to 370,289 vehicles.

Car sales are falling across the UK and Europe after years of strong growth, leading to a squeeze on production.

Britain’s car industry saw output peak in 1.7m in 2016, from the previous trough of below 1m in 2009.

The fall comes as a new independent forecast for the industry predicts that car production will fall by 30 per cent if the UK leaves the EU without a trading deal.

Output will drop to 1.07m units by 2021 if the UK moves to a World Trade Organization arrangement, according to a study by AutoAnalysis, a consultancy. The figure would be the lowest level since 1999, which was itself the worst year since 1984 for carmaking in the UK.

If the UK strikes a deal with the EU that includes maintaining current access to the market, car production will fall to 1.36m cars this year, and rise to 1.42m by 2021, the AutoAnalysis study predicted.

With a possible exit from the EU delayed until October, car companies are in “limbo”, the SMMT said, without knowing whether the current free trade with Europe will continue, or they will face tariffs and trade barriers.

The industry spent millions of pounds, including revamping supply chains and planning temporary plant closures, in preparation for Britain to leave the EU in March, a date that was subsequently pushed back.

“Despite the extension, the Brexit clock is still ticking and a devastating ‘no deal’ remains a threat,” said Mike Hawes, SMMT chief executive.

“This new period of limbo does not end the havoc for industry, with investment stopped and expensive factory shutdowns moved to avoid a Brexit deadline that has itself now moved.

“Just a few years ago, industry was on track to produce 2m cars by 2020 — a target now impossible with Britain’s reputation as a stable and attractive business environment undermined.”



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