Production stalls as exports slump

British car manufacturing output fell by more than a fifth in the first half of 2019, with a 15.2% decline in June marking the 13th consecutive month of negative growth. Exports fell 19.8% in June and 21% in the first half of the year.

This is according to figures released by the Society of Motor Manufacturers and Traders (SMMT).

It found that 666,521 cars rolled off production lines in the first six months, a year-on-year loss of 168,052 units due largely to falling demand in key markets, including the UK, exacerbated by factory shutdowns pulled forward in anticipation of the March Brexit deadline.

In June, output for the UK rose by 2,791 units following an anomalous 47.2% decline in the same month last year when preparation for the new WLTP emissions test impacted volumes. The underlying trend, however, remains downward, with year-to-date production for the domestic market down 16.4%.

Meanwhile, the number of cars built for export fell by 19.8% in June and by 21.0% in the first half of the year, with just over half a million units shipped overseas given softening of key overseas markets and global trade tensions. Exports to the sector’s top global markets fell by double digits, with the US down 12.9%, China down -3.1%, Japan -0.5% and Turkey -3.0%.

Demand in the UK’s biggest market, the EU, also fell, by 15.6%.

Mike Hawes, SMMT chief executive, said, ‘Today’s figures are the result of global instability compounded by ongoing fear of ‘no deal’. This fear is causing investment to stall, as hundreds of millions of pounds are diverted to Brexit cliff-edge mitigation – money that would be better spent tackling technological and environmental challenges.

‘The industry’s foundations are fundamentally strong, however, and we’re ready to work with the new government to build on these through the industrial strategy. We need an internationally competitive business environment to encourage more investment, more innovation and more growth. That starts with an ambitious Brexit deal that maintains frictionless trade and we look to the new administration to get a deal done quickly so manufacturers can get back to the business of building cars and helping deliver a brighter future for Britain.’