Currently reading: UK demand for British-built cars drops by almost half in June
Domestic demand struggles but exports remain buoyant
Rachel Burgess
News
4 mins read
31 July 2018

UK demand for cars built in the country declined by a massive 47.2% in June — the result of “a perfect storm”, according to the UK’s automotive industry body.

Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said the fall was not only due to uncertainty on diesel cars and the “cataclysmic fall in consumer confidence” but was also due to the effects of new WLTP emissions tests coming into force on 1 September. Car makers are struggling to complete tests on all models ahead of that deadline, resulting in delays.

Hawes added that other key reasons include model changes from certain manufacturers and model allocation per country changing globally at some brands.

New car registrations: first half of 2018 down 6.3%

European SUVs hit record high amid strong registration growth

While this initially appears a dismal situation, the bigger picture is more optimistic. Overall UK production figures for June, including both domestic and foreign demand, fell just 5.5% compared with June 2017, with 128,799 cars built. Cars made for export balanced out the weak UK demand, rising 6% year on year.

Half-year production figures down 3.3%

In the first half of the year, the number of cars built in the UK dropped by 3.3%, amounting to 834,402 units. In that period, UK demand dropped 12.9% and car exports fell by just 0.8%.

Hawes said the SMMT’s earlier prediction that 1.6 million cars would be built in the UK in 2018 remained likely, representing a 0.2% drop on 2017. 

He admitted that he was “surprised at the severity” of the almost 50% drop in UK demand in June but said he spoke to a number of car makers, all of whom described it as the “perfect storm”. He was keen to stress that we “must not look at the month in isolation”.

Hawes added that he expected the drop in UK demand to stabilise at a lower level of decline by autumn. More generally, the half-year manufacturing figures were “broadly in line with expectations”.

Individual car makers do not release their individual UK manufacturing figures. However, Britain’s largest car manufacturer, Jaguar Land Rover is believed to have produced around quarter of a million cars in the UK in the first six months of 2018, slightly down on last year. Jaguar Land Rover is not thought to have had many issues with WLTP testing, so its decline is more likely to be affected by falling diesel sales – something the car maker has previously flagged as problematic – and changing model cycles. The updated Range Rover and Range Rover Sport only started production in spring and a new Evoque is expected later this year, which is likely to mean people are holding off buying one. 

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Across the market, UK production is holding up better than UK car sales, thanks to the high number of cars exported. UK car sales in the first half of the year were down by 6.3% over the same period in 2017. That makes the UK the biggest shrinking market in Europe, according to Jato figures. 

The importance of free trade

The SMMT also used the figures to continue its push for a tariff and barrier-free trade agreement in Brexit negotiations. 

Nearly 81% of cars built in the UK in the first six months of 2018 were exported, with the biggest market being Europe. The region accounted for 53.4% of exports, or 360,270 units. 

The second-biggest market was the US; 108,000 cars were exported there in the first half of 2018.

While the UK exports eight out of every 10 cars built here, it is also a major importer. More than 87% of cars registered by British buyers in the first six months of the year came from overseas, with more than two-thirds from the European Union. 

Hawes said: “First-half figures are a reminder of the exports-led nature of UK automotive, the integrated EU supply chain and our mutual dependency on free and frictionless trade. The UK Government’s latest Brexit proposals are a step in the right direction to safeguard future growth, jobs and consumer choice — not just in Britain but right across Europe. 

“We now look to negotiators on both sides to recognise the needs of the whole European automotive industry which, combined, employs more than 12 million people. Any disruption risks undermining one of our most valuable shared economic assets.”

Read more 

Analysis: Are car makers ready for WLTP?

New car registrations: first half of 2018 down 6.3%

European SUVs hit record high amid strong registration growth

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Comments
23

31 July 2018

 You have to be, we still don’t know what flavour of Brexit we’re going to get.....

31 July 2018
Peter Cavellini wrote:

 You have to be, we still don’t know what flavour of Brexit we’re going to get.....

Brexit will be short term pain for long term gains

31 July 2018
GODFATHER wrote:

Peter Cavellini wrote:

 You have to be, we still don’t know what flavour of Brexit we’re going to get.....

Brexit will be short term pain for long term gains

What gains? Do you really think we can sell more cars to the US, China and India? Good luck competing on Tariffs and Labour costs. Given that we won't sell more to those countries and the EU is a huge market then where else can we sell cars? Australia? Hardly a massive car market, not exactly the most populated place in the world.

When Brexiteers make comments like this Remainers keep asking the questions above but get no answers. Bet I don't get an answer now! 

31 July 2018
GODFATHER wrote:

Brexit will be short term pain for long term gains

Short term pain for long term pain, I think you mean.

31 July 2018
renster]</p><p>[quote=GODFATHER wrote:

Brexit will be short term pain for long term gains

Short term pain for long term pain, I think you mean.

[/quote

+1

31 July 2018
renster wrote:

GODFATHER wrote:

Brexit will be short term pain for long term gains

Short term pain for long term pain, I think you mean.

 

Grow up.

31 July 2018

The headline to this article is plain wrong. UK demand didn't drop by half. It was the inability to supply / sell cars in the UK due to WLTP that caused a drop in production for the UK market to avoid stocks building up.

31 July 2018

"UK demand for cars built in the country declined by a massive 47.2% in June " out of interest out much did demand for cars built OUTSIDE the UK fall/rise?

When people buy a car most don't care where it's built they buy what thay want/need.

31 July 2018

NEDC - New European Driving Cycle - theoretical driving test which has become outdated.

WLDP - World Harmonised Light Vehicle Test - based on real-world driving ( yeh, whatever) and introduced by EU. This according to Mr Hawes is a cause of declining car sales.

Solution?  Once we're out of the EU we can put this bureaucratic piece of law to rest. Doesn't matter how a car is tested just as long as all cars are given the same test then we can compare. But for anyone thinking a test is going to produce accurate figures for a car driven by differnt drivers, with differnet driving styles, over different terrain, in differing weather conditions and carrying different loads...   WLDP is just another complete waste of time and money...   the faster we leave the bureaucrat EU the better. 

31 July 2018
scotty5 wrote:

NEDC - New European Driving Cycle - theoretical driving test which has become outdated.

WLDP - World Harmonised Light Vehicle Test - based on real-world driving ( yeh, whatever) and introduced by EU. This according to Mr Hawes is a cause of declining car sales.

Solution?  Once we're out of the EU we can put this bureaucratic piece of law to rest. Doesn't matter how a car is tested just as long as all cars are given the same test then we can compare. But for anyone thinking a test is going to produce accurate figures for a car driven by differnt drivers, with differnet driving styles, over different terrain, in differing weather conditions and carrying different loads...   WLDP is just another complete waste of time and money...   the faster we leave the bureaucrat EU the better. 

You state the NEDC is outdated, which is clearly correct in light of dieselgate.

You state all cars have to be tested in the same way to allow comparison, which is also correct. (You unfortunately also state it doesn't matter how cars are tested, which is clearly incorrect given the NEDC debacle that you've already alluded to by calling it outdated, you appear to be contradicting yourself there, but we can ignore that).

Enter the WLTP, a far more accurate testing method that is much harder for manufacturers to game in the way they did other dieselgate. In addition, because it's bring introduced by the EU,it applies to all our car manufacturing neighbours equally resulting in consumers being able to quickly compare vehicles on a like for like basis, whilst ensuring no country has an unfair commercial advantage.

Despite these advantages you somehow make 2+2=5 by calling it a complete waste of time and money and a reason to leave the "bureaucrat EU". What exactly do you think will happen to WLTP once we leave the EU? Do you think UK motor manufacturers will just stop using WLTP and develop their own emissions test procedure? That would just be more bureaucracy and it result in no consumers, in the UK and beyond, being able to compare a Jag with Merc. Do you honestly believe that would help UK manufacturers? Please enlighten me.

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