UK car production down 18.2% year-on-year in October: SMMT

UK car manufacturing output fell by 18.2% year on year in October, with 110,179 units leaving factory gates, according to figures issued Nov. 26 by the Society of Motor Manufacturers and Traders.

“October’s performance rounds off an extremely tough 10 months for UK car makers and suppliers, and production is now down 33.8% since January to 743,003 units,” SMMT said in a statement.

Last month’s figure represented 24,490 fewer cars made than in the same month in 2019, with the impact of coronavirus and fresh lockdowns at home and overseas subduing demand in many key markets, the group said.

For the first 10 months of the year, 379,308 fewer cars worth around GBP10.4 billion ($13.9 billion) were produced.

October’s decline was driven largely by falling exports, particularly to the EU and US, down 19.1% overall and equivalent to a loss of 21,569 vehicles, SMMT said. Shipments to the US fell by 26.0% year on year, while exports to the EU by were down 25.7%.

“Major Asian markets fared better, with exports to Japan and China up 57.1% and 9.7%, respectively, reflecting less stringent lockdown measures, but this was not enough to offset losses elsewhere,” SMMT said.

Production for the domestic market also fell, by 13.6% to 18,629 units, with 2,921 fewer cars made for buyers in the UK than a year earlier.

“These figures are yet more bad news for an industry battered by COVID, Brexit and, now, the unprecedented challenge of a complete shift to electrified vehicles in under a decade,” said Mike Hawes, SMMT’s chief executive, in a statement.

The UK government’s Nov. 25 spending review “recognized the need to invest in a green industrial revolution, but this must be at globally competitive levels and equal to the scale of ambition to keep this sector match fit,” he said.

“Above all,” Hawes said, “we must have a Brexit deal, one with zero tariffs, zero quotas and rules of origin that benefit existing products and the next generation of zero-emission cars, as well as a phase-in period that allows this transition to be ‘made in Britain.”

The UK’s transition period as it exits the European Union ends on Dec. 31, with no trade deal with the EU in place as yet.

Earlier this week, SMMT released figures suggesting that production losses could cost as much as GBP55.4 billion over the next five years if the UK automotive sector was forced to trade under World Trade Organization conditions over the long term. Even a so-called “bare-bones” trade deal with the EU would cost the industry around GBP14.1 billion, SMMT said.

“Industry bosses will be glad to wave goodbye to 2020. Yet the outlook for next year is uncertain as manufacturers seek to adapt to a new trading environment and wait to see if the threat from coronavirus and its effect on consumer demand begins to diminish,” Stuart Apperley, director and head of UK automotive at Lloyds Bank, said Nov. 26.

“Many will hope that the recent positive vaccine news, and anticipated rollout, will boost consumer sentiment and give people the confidence to make big-ticket purchases, such as a new car,” he added.

In the longer term, the UK government’s plan to take all petrol and diesel vehicles, except hybrids, off the roads by 2030 “confirms a clear direction of travel,” Apperley said.

“Many UK carmakers are well-placed to capitalize on the new rules, though others have work to do,” he said. “Either way it’s a huge incentive for the industry — and its supply chain — to invest in the technology and nudge customers towards choosing cleaner vehicles.”

— Andy Blamey