Car production slump prompts plea for Brexit deal

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The UK is on course to produce fewer than one million cars this year as companies contend with an uncertain economic and political environment and COVID-related challenges.

car production
(Image: Toyota)

This bleak assessment has been made by the Society of Motor Manufacturers and Traders (SMMT) which notes a five per cent drop in car production in September to 114,732 units, a decline of 6,000 cars compared to September 2019.

SMMT chief urges ‘ambitious free trade agreement’ with EU

Exports declined 9.7 per cent in September to 87,533 units – 9,500 fewer vehicles year-on-year - as shipments to key overseas destinations, including China, the EU and US fell 1.2 per cent, 3.3 per cent and 30.0 per cent respectively. Production for the UK climbed 14.5 per cent, equivalent to a rise of 3,440 vehicles.

So far in 2020 UK car production has dropped 35.9 per cent behind 2019 levels, with 632,824 vehicles built. According to SMMT, the latest independent outlook forecasts factories to make fewer than 885,000 cars this year, a situation last experienced in 2009.

Figures for the production of battery electric vehicles (BEVs) show year-on-year growth of 37 per cent, with 76.6 per cent exported and many destined for the EU. SMMT note that a 10 per cent World Trade Organisation (WTO) tariff would increase the cost of UK-made electric cars exported to the EU by an average £2,000 per vehicle, making the UK a less attractive destination for international investment.

(Image: SMMT)

In a statement, Mike Hawes, SMMT chief executive, said: “These figures are yet more grim reading for UK Automotive as coronavirus continues to wreak havoc both at home and in key overseas markets.

“With the end of transition now just 63 days away, the fact that both sides are back around the table is a relief but we need [Brexit] negotiators to agree a deal urgently, one that prioritises automotive, enhances innovation and supports the industry in addressing the global threat of climate change.

"With production already strained, the additional blow of ‘no deal’ would be devastating for the sector, its workers and their families.”