Car production tumbles almost 20% on exports slump

UK car manufacturing fell by almost 20 per cent in January, the eighth straight month of decline, amid a sharp deterioration in some of Britain’s largest export markets such as China and mainland Europe, according to industry data released on Thursday.

A total of 120,649 cars were made in British factories in January, down 18.2 per cent compared to the same month in 2018, said the Society of Motor Manufacturers and Traders, the industry trade body.

The latest output figures follow a poor 2018 for British factories, with production falling by 9.1 per cent to 1.5m cars, the lowest level for five years.

UK exports of cars to China dropped by 72.3 per cent in January compared to one year earlier, while those to mainland Europe fell by 20 per cent.

Total exports, which typically account for four out of five cars made in Britain, dropped by 21.4 per cent to 93,781 vehicles. Domestic production fell by 4.8 per cent to 26,868 vehicles.

Mike Hawes, SMMT chief executive, said the decline was a “serious concern”.

The downturn comes as British car factories prepare for the UK’s departure from the EU by stockpiling parts and drawing up expensive contingency plans ahead of the scheduled departure date of March 29.

The SMMT has warned about the “catastrophe” of a no-deal Brexit involving border checks and tariffs. Carmakers face significant disruption if the UK crashes out of the EU without a deal because many rely on components coming from mainland Europe on a “just in time” basis.

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Several carmakers, including BMW and Jaguar Land Rover, have arranged shutdowns at their factories in April with the aim of minimising disruption.

Mr Hawes said that preparations for Brexit were “monopolising time and resources” of carmakers and “undermining competitiveness” of their factories. “Every day a no-deal Brexit remains a possibility is another day automotive companies pay the price in additional and potentially pointless costs,” he added.

The EU is Britain’s largest export market, accounting for more than half of overseas sales, followed by the US and China.

Much of the decline in Chinese exports last month is believed to stem from JLR, the UK’s largest carmaker, owned by India’s Tata Motors. JLR’s sales in China in the final quarter of last year fell by about 50 per cent.

The SMMT said that model changes, with some carmakers winding down production of older versions ahead of making new ones, had also contributed to the fall in output.



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