UK car production is in decline, and has been for seven straight months in a row. It’s down by 4.4% in February, as production for the home market fell by double figures, according to data published by the Society of Motor Manufacturers and Traders (SMMT). Moreover, exports from UK car factories have also declined.
The SMMT reports that UK exports have declined less seriously than overall production. UK exports are down by 0.8%, with 117,139 vehicles shipped overseas in February. This number accounts for more than 80% of UK car output, and clearly shows how dependent the economy is on exchange rates and potential import tariffs.
Demand at home is where the biggest drops are. February production for the UK fell by 17.0% to 28,336 units, with 145,475 units produced compared with 152,232 for the same period in 2017. Year-to-date production is down 2.3%, while domestic demand in 2018 so far has fallen away to the tune of 11.9%.
UK abandons 2020 targets in slowing economy
According to a report in The Guardian, the UK car industry has abandoned its target to build more than two million cars a year by 2020. That would have been a record for the UK, overtaking the previous best of 1.92m in 1972. Weak UK sales are contributing most to the slowdown – and that’s down to a number of issues, not just Brexit uncertainties.
Currently, around 80% of UK cars are sold abroad, with the largest trading area for the UK car industry being the EU. In 2017, exports fell 1.1% to 1.33 million. That’s in stark contrast to the number of UK cars sold domestically, which fell 9.8% to 336,628. Andy Barratt, Chairman and Managing Director of Ford in the UK, said the Government is listening to the British car industry. ‘We have an active voice. Industry has been very clear and consistent about what it needs.’
In contrast, Jaguar Land Rover, Britain’s biggest carmaker, said in January that it would reduce the number of cars made at Halewood, blaming faltering sales after the Brexit vote and a tax crackdown on diesel vehicles – and the vast majority of JLR’s products are diesel powered.
Toyota will continue to invest in the UK
Toyota’s European Chairman previously warned of a fog around negotiations over Britain leaving the EU, and that this issue had the potential to stall its investment here. Didier Leroy said: ‘Today they export 80-85% of production to Europe, so if we move to something like an import tax, trade tax or any kind of additional penalty, it will create a big negative impact in terms of competitiveness for this plant.’
However, at the Geneva Motor Show in March 2018, Toyota announced that the next-generation Auris (below) would be built in the UK, and that the Burnaston plant would be overhauled to build the car, which is based on the Toyota New Generation Architecture (TNGA). This represents a £250m investment, and also opens up the opportunity to build other models alongside the new hatchback.
Mike Hawes, SMMT Chief Executive, commented on February 2018’s figures by saying, ‘Another month of double digit decline in production for the UK is of considerable concern, but we hope that the degree of certainty provided by last week’s Brexit transition agreement will help stimulate business and consumer confidence over the coming months. These figures also highlight the scale of our sector’s dependency on exports, so a final deal that keeps our frictionless trade links with our biggest market, the EU, after December 2020 is now a pressing priority.’
Is the Editor of the Parkers website and price guide, formerly editor of Classic Car Weekly, and launch editor/creator of Modern Classics magazine. Has contributed to various motoring titles including Octane, Practical Classics, Evo, Honest John, CAR magazine, Autocar, Pistonheads, Diesel Car, Practical Performance Car, Performance French Car, Car Mechanics, Jaguar World Monthly, MG Enthusiast, Modern MINI, Practical Classics, Fifth Gear Website, Radio 4, and the the Motoring Independent...
Likes 'conditionally challenged' motors and taking them on unfeasible adventures all across Europe.