Exports accounted for 80% of demand for the month when output was down by 4.4%

Car manufacturing in Britain fell for the seventh consecutive month in February, with 145,475 models being rolled off of production lines.

The figure, published by the Society of Motor Manufacturers and Traders (SMMT), equates to a 4.4% decline on the same month of 2017. The fall was largely driven by domestic demand, which was down by 17% to 28,336 units for the month.

Exports were down by a much less significant 0.8%, with 117,139 now being shipped abroad – ensuring that Britain’s car exports now account for more than 80% of overall demand.

The month continued a trend of decline for the year-to-date, which is now 2.3% below this point in 2017 with 292,956 cars rolling out of UK production plants. Domestic demand for the year to date is 11.9% down, although exports are up 0.3% so far.

UK new car market continues to decline in February

SMMT boss Mike Hawes said: “Another month of double-digit decline in production for the UK is of considerable concern, but we hope that the degree of certainty provided by last week’s Brexit transition agreement will help stimulate business and consumer confidence over the coming months.

“These figures also highlight the scale of our sector’s dependency on exports, so a final deal that keeps our frictionless trade links with our biggest market, the EU, after December 2020 is now a pressing priority.”

The SMMT pointed to the growing role of exports to emphasise the importance of securing a tariff-free trade deal with Europe. It said that the UK’s car industry delivers £22.8 billion directly to the Treasury each year, so damaging its competitiveness could lead to another “cliff-edge” in output numbers.

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Hawes said: “The next major hurdle will be securing a new, comprehensive trade agreement with the EU and our partners across the world.” He added that while the government’s Industrial Strategy and Automotive Sector Deal, which sets out plans designed to increase the competitiveness of the UK car industry, are “positive steps”, concrete action is needed “if we are to stay ahead in what is an intensely competitive global environment”.

The SMMT’s recent Production Outlook report forecasts that the UK car manufacturing industry, which employees 169,000 people, will continue its trend of output decline, with 1,729,000 units expected in 2018. But the report predicts positive decisions to provide the potential for production growth to begin again in 2023.

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Comments
12

29 March 2018
I have yet too meet anyone, either in business or personally, who has said 'I'm not buying a new car because of all this Brexit uncertainty'.

The real disruptive uncertainty is entirely of their own making - diesel fraud.

And then there is the problem that the development of cars has run out of steam. More and more, I prefer the previous versions of cars.

29 March 2018

Wait this can’t be right Brexiteers told us that the German car industry needed a deal more than we did. Now it turns out we need a deal more than they do! Did they tell a naughty again?

29 March 2018

They need each other, new deal will be a breath of fresh air unlike the fumes admitted from VW's. 

typos1 - Just can’t respect opinion

29 March 2018

Everything would be running normally if it was not down to the goverments bad handling and demonisation of diesels which is causing mass confusion and as such reducing demand. Until there is a better alternative for long distance driving the cleanest EU6 diesels are still an attractive purchase. Everything is as normal as outside the UK and it's lucky that we produce vehicles that the rest of the world want to purchase otherwise we would be back to the 1970's where we lost most of our car industry.

29 March 2018
Fluffs wrote:

Everything would be running normally if it was not down to the goverments bad handling and demonisation of diesels which is causing mass confusion and as such reducing demand. Until there is a better alternative for long distance driving the cleanest EU6 diesels are still an attractive purchase. Everything is as normal as outside the UK and it's lucky that we produce vehicles that the rest of the world want to purchase otherwise we would be back to the 1970's where we lost most of our car industry.

The Government didn’t demonise diesels, VW et al did. 

Everything is not normal outside the U.K. Germans are now rejecting Diesel engines at a greater rate than buyers here. 

29 March 2018

These are the reasons purchasers have put off buying.

Steam cars are due a revival.

29 March 2018

 I can’t see where car sales are down, there are plenty new Cars out there, ok, the most popular seem to be German followed be Seat, and I’ve lost count of Range Rovers!, so there must be attractive deals out there.

Peter Cavellini.

29 March 2018

Saw a 10 year old BMW 1 series, it could have been brand new it was so clean and the shape is similar to the current model. 

My point, I was brought up when a 10 year mk1 Escort with 100,000 on it was living on borrowed time, you can now expect 15 yrs and 200,000, so there's 50% fewer sales.'

People in this country are beginning to realise their new car isn't much better than the one they just lost £10,000 on after 3 years.

 

typos1 - Just can’t respect opinion

29 March 2018

You can now buy a decent used car with less than 60,000 miles on it for less than £1500.  So where is the reason to spend more other than wanting the latest version.  Spend the rest on something else more interesting and fun.

29 March 2018
vptessesteve wrote:

You can now buy a decent used car...

Something not mentioned by the usual whining SMMT. Recent years have been good for pretty much all car makers. The market is cyclical, the US has already turned - what's the excuse there - no Brexit, no dieselgate, stockmarket and employment doing well. All those PCP'd and leased cars have to go somewhere, resulting in a shortfall in residual values and squeezing affordability. Sales would be falling here regardless of the situation around Brexit or diesels, the SMMT members happily pumped too much supply into the market and consumers lapped it up, now the price is being paid.

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