UK car manufacturing falls again as Brexit concerns grow

Car manufacturing output in the UK has fallen for the third consecutive month as concerns over a no-deal Brexit continue.

Figures from the Society of Motor Manufacturers and Traders (SMMT) reveal that 89,254 vehicles were produced in August, a 12.9% decline when compared to the 102,438 cars manufactured over the same period last year.

According to The Sunday Times, the decline “by nearly a fifth of British-made cars for the domestic market” has been the “biggest culprit” behind the fall in vehicle production. This is partly due to exports to mainland Europe, which account for roughly four in five cars made in the UK, falling by 3.8% in August.

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But the newspaper notes that major foreign investors in British-based manufacturers are also reportedly “sitting on their hands because of the uncertainty over Brexit”.

Some manufacturers have started considering “contingency plans” in the event of a no-deal Brexit, the Financial Times says.

For example, the FT says BMW is planning a four-week closure of its Oxford-based Mini facility in April “to coincide with a period that might include disruption to its supply chain”.

Mike Hawes, chief executive of SMMT, says the dip in vehicle production is often expected over the summer owing to the “timing and duration of annual maintenance and re-tooling shutdowns”.

“This instability was exacerbated in August,” he says. This could be attributed to manufacturers preparing models to meet the tougher emissions and fuel economy tests introduced by the Worldwide Harmonised Light Vehicle Test Procedure (WLTP) on 1 September.

However, the fall in vehicle exports to European countries highlights the “importance of a Brexit agreement to safeguard this trade”, Hawes adds. “For our sector, no-deal is not an option.”