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News | Published January 30 2020

Brexit uncertainty sees lowest car production in a decade

2019 saw the lowest rate of car production since 2010, with output predicted to continue falling this year.

According to figures from the Society of Motor Manufacturing and Traders, 1.3 million units were produced in the last year, the third year of decline in a row, and a decrease of 14.2 per cent on the year prior.

Mike Hawes, the boss of SMMT, considers the figures to be of “grave concern".

He continued “Given the uncertainty the sector has experienced, it is essential to protect our global competitiveness, and that starts with an ambitious free trade agreement with Europe – one that guarantees all automotive products can be bought and sold without tariffs or additional burdens."

At present, 81 per cent of cars are built with the express intention of being exported. The majority of these are sold within the European Union. A barrier-free EU trade deal following Brexit will be fundamental to the success of the industry according to Hawes.

Last year shipments to countries within the EU declined by over 11 per cent, however, the bloc continues to be the most important market for the industry.

The production of cars for sale in the UK declined by 12.3 per cent, compared with a decrease of almost 15 per cent for vehicles for export.

Hawes considers the greatest post-Brexit obstacle to be the export and import of component parts for the manufacturing of cars, especially given the integrated nature of the European motor industry.

He stated "This will boost manufacturing, avoid costly price rises and maintain choice for UK consumers. Negotiations will be challenging but all sides stand to gain.”

It is estimated that the UK’s departure from the European Union will see an increase of £1500 to car prices, meaning the average cost of a car will stand at £22,700.


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Authored by

Alice Jaspars
Culture Editor
@
January 30 2020

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