UK car production down as domestic demand tumbles by 14.2%

Jaguar XF

UK car plants are producing less vehicles than last year

British output linked to fall in European registrations amid economic uncertainty

UK car production took a hit for the fifth month in a row in September as domestic demand fell by 14.2% to 31,421 units.

Production reached 153,224 units across the four weeks, a 4.1% decrease on September 2016, with exports also down by 1.1% to 121,803.

The UK’s year-to-date performance now totals 1,259,509 at the last count, which is 2.2% or 28,171 units down on the same point from 2016.

The impact of Britain’s slowing industry was reflected in European registration numbers, which fell by 2.2% to 1,461,683 vehicles.

The UK was among the worst hit, with registrations here down by 9.3%, although Ireland, Denmark and Latvia saw even bigger falls, albeit as considerably smaller markets. More significant was Germany, Europe’s biggest market ahead of the UK, where registrations were down by 3.3%.

Despite the slump in UK output, figures from the last six years show that output still ranks significantly higher than period of slow growth after the economic crisis. Since last September the UK has produced 1,694,663 vehicles, but even as recently as 2015 that number was closer to 1.5 million.

However, Society of Motor Manufacturers and Traders CEO Mike Hawes warns that this downward trend is an example of the damage to progress recent economic uncertainty and changing automotive legislation, like the new London T-charge and Oxford’s potential ban on combustion engine cars, is causing. Before last year’s Brexit vote, the UK’s rate of progress was consistently breaking records.

“With UK car manufacturing falling for a fifth month this year, it’s clear that declining consumer and business confidence is affecting domestic demand and hence production volumes,” he said. “Uncertainty regarding the national air quality plans also didn’t help the domestic market for diesel cars, despite the fact that these new vehicles will face no extra charges or restrictions across the UK.”

“Brexit is the greatest challenge of our times and yet we still don’t have any clarity on what our future relationship with our biggest trading partner will look like, nor detail of the transitional deal being sought. Leaving the EU with no deal would be the worst outcome for our sector so we urge government to deliver on its commitments and safeguard the competitiveness of the industry.”

Felipe Munoz, the global automotive analyst at JATO (the market trends company that supplied the European figures) labelled the UK’s performance as a key cause for the region’s down turn.

«As anticipated, European registrations are starting to slow down following their unprecedented run of strong results,” he said. “Whilst a drop after such high levels of growth is not unusual, it is clear that the recent performance of the UK car market – one of Europe’s most significant – is having a substantial impact on the European car market as a whole.”

Despite the overall decrease, SUV sales continued to defy the market with models like the Nissan Qashqai and Volkswagen Tiguan continuing to grow in demand. The Qashqai is now Europe’s second best-selling car after the Volkswagen Golf, with 1915,060 registrations to the Golf’s 356,562 so far in 2017.

Munoz commented on the segment, stating that “the segment reached a record market share of 31.6% in September, with 462,000 SUVs registered for the month – an impressive growth of 14.1%.

This increase has taken the year-to-date volume of SUVs across Europe to 3.47 million units, which is 553,000 units more than in the same period in 2016.

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Source:: Autocar

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