Automotive industry ‘on red alert’ as demand and investment plummets
The Society of Motor Manufacturers and Traders (SMMT) said “UK Automotive is on red alert” ahead of a feared no-deal Brexit which would put “thousands of jobs on the line”.
UK car production hit a five-year low in 2018, with 150,000 fewer cars manufactured than a year before.
The SMMT’s data also revealed that fresh inward investment in the sector plummeted in the year – down almost half on 2017 to £589m.
Overall car production was down 9.1% last year, although domestic demand fell at a much faster rate, plunging 16.3%. Four out of every five cars made in the UK are exported.
Jaguar Land Rover (JLR), which is responsible for three out of every 10 cars manufactured in the UK, produced 83,000 fewer vehicles while the second-largest manufacturer Nissan reduced its output by 53,000. Vauxhall, in Ellesmere Port, had the largest percentage drop of the large manufacturers, down 15.9%, as it produced nearly 15,000 fewer cars.
Credit: SMMT
JLR, which has manufacturing sites across the West Midlands and in Merseyside, has already revealed thousands of job cuts as it responded to the slowdown in sales. It has already faced difficulties because of a big drop in demand from China and consumers’ wariness of buying diesel cars.
Mike Hawes, SMMT chief executive, said: “With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK Automotive is on red alert. Brexit uncertainty has already done enormous damage to output, investment and jobs.
“Yet this is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the EU but with the many other global markets with which we currently trade freely.
“Given the global headwinds, the challenges to the sector are immense. Brexit is the clear and present danger and, with thousands of jobs on the line, we urge all parties to do whatever it takes to save us from ‘no deal’.”
The decline in UK car manufacturing in 2017 and 2018 follows seven years of unprecedented growth for the sector as it emerged from recession faster than any other major EU market, with output rising more than 70% in that time.
