Car production falls for third consecutive month

UK car production fell by 13.7 per cent in June compared with the same period last year, the Society of Motor Manufacturers and Traders (SMMT) has announced.

There were 136,901 cars produced last month, compared with 158,641 in June 2016. It marks the third consecutive month of decline and a 2.9 per cent drop in year-to-date production figures.

So far this year, the UK has produced 866,656 new vehicles, with 78.9 per cent of those exported to foreign markets.

While year-to-date production has dropped in 2017, an independent forecast predicts that it will pick up again later in the year – owing in part to new models and updates being released. Many of these are from premium brands and will help the UK secure its position as the world’s second-largest premium automaker after Germany.

However, it is feared that market softness in the UK and key export markets could see this forecast revised. For 2020, the base outlook, which assumes a Brexit deal of some form has been secured, sees UK production fall short of the goal of two million vehicles produced by that year.

There is also concern that production may decline in 2019 if no Brexit deal or interim deal is secured.

Mike Hawes, SMMT chief executive, said: “World-class engineering, productivity, strong government collaboration and massive investment in the past few years have helped UK Automotive become a global success story.

“At the heart of this has been the free and frictionless trade we’ve enjoyed with the EU – by far our biggest customer and supplier. But Brexit uncertainty is not helping investment and growth is stalling.

“The government has been in ‘listening’ mode but now it must put on the table the concrete plans that will assure the future competitiveness of the sector.

“Investors need certainty so, at the very least, the UK must seek an interim deal which maintains single market and customs union membership until we have in place the complex new agreement sought with the EU.”