Car production in the UK slumped by 44.6% in August, according to the Society of Motoring Manufacturers and Traders (SMMT), as the industry still feels the cold winds of coronavirus and Brexit. Only 51,039 cars left production lines, with 42,244 heading to foreign markets. It contrasts against a particularly strong 2019, when manufacturers worked through the summer break, having downed tools in April in preparation for a ‘no deal’ Brexit.
Overall this year production is down 40.2%, which amounts to £9.4 billion in losses for the industry. At least 13,500 jobs have been cut across the automotive sector, and with a second wave of COVID-19 expected, there is little hope for recovery any time soon. The SMMT estimates Britain is on course to produce a total of 885,000 cars this year, a fall of 34% compared to 2019. Not only is the coronavirus having an impact, but the prospect of a no deal Brexit is also looming, making the market extremely nervous and unstable.
Under a no deal scenario, it’s estimated the trade tariffs could mean UK car production would slump to 750,000 a year by 2025, as such a large volume of domestically produced cars are sold to foreign markets.
Mike Hawes, SMMT Chief Executive, said: “These are increasingly disturbing times for UK car makers and suppliers with the coronavirus crisis weighing heavily on the sector. Companies are bracing for a second wave with tighter social and business restrictions making the industry’s attempts to restart even more challenging. The UK industry is fundamentally strong and agile, and the measures announced yesterday by the Chancellor are welcome and essential, although we await more details of how they will work for all businesses and crucially large manufacturers.
“Companies need to retain skilled jobs and maintain cashflow and we may need more support to boost business and consumer confidence later this year. Moreover, with fewer than 100 days until the Brexit transition period ends, we need urgent agreement of an ambitious free trade deal with our largest market to avoid the second shock of crippling tariffs.”
Keyword: UK car production down 44% in August