UK car production falls by a quarter in July

FOLLOWING its best half-year since 2008, the UK car manufacturing industry experienced a sharp dose of reality in July with production falling more than 11%.

The total number of cars produced for the domestic market fell by almost a quarter (24%) compared with the same month last year.

The Society of Motor Manufacturers and Traders said the latest figures should be set against changes to holiday patterns as some manufacturers brought forward their annual shutdowns.

However, while this may be true, shutdowns and holidays were also experienced in July last year and the output figures were much higher.

The performance lends credence to the views of many analysts that the new car markets will slowly start to stabilise in the second half, suggesting that the days of spectacular growth may be coming to an end.

One encouraging factor for the industry will be the launch of the new registration plates in September, which could see this month’s output boosted.

However, while the UK slowdown is disappointing, another factor to cheer the industry will be an increase in the percentage of vehicles produced for export. The figures for overseas markets – especially Europe – have been sluggish for some time, while concerns about consumer trends in China have also cast a shadow over the industry.

Nevertheless, the SMMT was determined to look on the positive side.

It said July’s performance reflected the normal cyclical falls in output during the summer months, when seasonal shutdown programmes occurred across the majority of manufacturers. Many firms use the period for essential plant maintenance, upgrades and retooling.
 
Mike Hawes, SMMT chief executive, said: “Car production is traditionally subject to a degree of fluctuation during the quieter summer months with some manufacturers pausing production to invest in upgrades and prepare for new model launches, as well as to manage holiday leave. The industry remains in a strong position, with more than 911,000 cars produced so far this year and some significant new model introductions due in the autumn.”

Total production for July 2015 was 117,665 (2014: 132,570), a fall of 11.2%. Vehicles produced for the UK market were 22,500 (2014: 29,589), a fall of 24%.

The number of vehicles produced for export in July were 95,165 (2014: 102,981), a drop of 7.6%. Nevertheless, the percentage of the total number of cars for export grew by 3.2% from 77.7% last July to 80.9% this year.

The spectacular start to the year means the figures for the year-to-date are still positive so far as the UK is concerned.

In the first seven months of the year, the UK motor industry has produced 911,307 vehicles (2014: 923,884), a decline of 1.4%.

For the UK market, the production volumes stand at 211,098 (2014: 195,444), an increase of 8%. However, the figures for export are less impressive standing at 700,209 at the end of July (2014: 728,440), a fall of 3.9%.

The percentage of cars produced for export stood at 76.8% at the end of last month, a drop of 2% on the figures for the same time last year (78.8%).