Brexit contingencies and a slowdown in demand from overseas markets has seen output from Britain’s car manufacturers slump by nearly half in April.
Figures from the Society of Motor Manufacturers and Traders (SMMT) show that 70,971 cars were produced in April, down -44.5 per cent year-on-year as factory shutdowns, rescheduled to mitigate a March 29th Brexit, took effect.
According to SMMT, manufacturing for domestic and overseas markets fell -43.7 per cent and -44.7 per cent respectively as most volume manufacturers brought forward production stoppages usually scheduled for the summer holiday period.
Rescheduled shutdowns have formed part of ongoing contingencies – including stockpiling, training for new customs procedures and rerouting of logistics – designed to protect businesses when Britain leaves the customs union and single market.
Slowing demand in international markets – including the EU, China and the US – as well as at home have exacerbated April’s figures, which represent the 11th straight month of decline.
“Prolonged instability has done untold damage, with the fear of ‘no deal’ holding back progress, causing investment to stall, jobs to be lost and undermining our global reputation,” said Mike Hawes, SMMT chief executive. “This is why ‘no deal’ must be taken off the table immediately and permanently, so industry can get back to the business of delivering for the economy and keeping the UK at the forefront of the global technology race.”
SMMT said the situation could stabilise if Britain leaves the EU with a favourable deal and substantial transition period. Provided there is no escalation in global trade tensions, the decline in volumes will be helped further as new models come on stream and production lines remain active over the usual summer shutdown months.
Production Outlook, an independent forecast of UK vehicle manufacturing commissioned from AutoAnalysis, suggests that even with a favourable deal and transition period output will still be down -10.5 per cent on 2018 levels. A ‘no deal’ Brexit, however, could worsen this decline, with the threat of border delays and production stoppages.
Commenting on SMMT’s latest findings, Stuart Apperley, director and head of UK automotive at Lloyds Bank Commercial Banking, said: “On the face of it these figures make for stark reading, but things may not be as bleak as they first appear.
“A significant dip in output has always been on the cards for April as a result of the planned summer factory shutdowns being brought forward. With this in mind, we expect a clearer picture to emerge in the coming months when the impact of the shutdowns has worked its way through.
“There is no avoiding that the UK’s car industry remains particularly susceptible to any vulnerabilities the wider economy faces. It also has its own challenges – from record levels of stockpiling to falling confidence affecting demand on the continent, and China’s continued slump in sales.”
I read today that HMG have spent £100,000,000 already on consultancy to advise about post-Biscuit affairs. How splendid if those who started-off this farce (and its not only a French-bedroom involved, but all the other EC nations, including ourselves) had spent this much of their own money defining the likely results BEFORE starting.
The industry went through a major shock of governmental policy change towards diesel. Then this mess was followed by a disastrous set of Brexit negotiations: home, roost, come, the, have,chickens,to!
Our governors still believe that the services sector can generate wealth, even though it is a net wealth consumer.
Way back in 1975, when I started out as a Mechanical Engineering Apprentice, there were engineering companies everywhere – many of which were manufacturing products that were generally regarded as the best in the world. And yes, we still had British manufacturers making motor vehicles (rather than companies assembling vehicles for foreign owners). Within a decade this had all gone and one in ten of the population was unemployed. Whatever fears there may be over a no-deal Brexit, if it happens then it will prove insignificant in terms of what happened within two years of joining the Common Market. I’m no Historian but hopefully someone who is will be able to explain to us all just what happened and why we should concern ourselves with what the SMMT think will or will not happen.
From the ONS: “The services sector makes up approximately 80% of UK gross domestic product (GDP)”
https://www.ons.gov.uk/economy/economicoutputandproductivity/output/articles/servicessectoruk/2008to2018