Car production in the UK slumped over the past six months to the lowest it’s been since 1954 – the year that food rationing ended – according to new figures out today (Jul 30).
There was a 42.8 per cent drop to 381,357 cars from January to June against the same period last year, said the Society of Motor Manufacturers and Traders. A total of 379,510 units was produced between January and June 1954.
Car production in June dropped by nearly half – 48.2 per cent – compared with June 2019, with 56,594 units made, as social distancing measures and weak global demand continued restricting output.
June manufacturing for the domestic market was down by more than three-fifths – 63.8 per cent – to 6,670, while exports were 45 per cent lower at 49,924.
The coronavirus crisis resulted in widespread closures and job losses, and the trade body has warned that more will be at stake, with fears of a ‘double whammy’ of Brexit tariffs.
The SMMT estimates that 11,349 jobs were axed over the past six months at carmakers and firms supplying them with parts and services.
It now wants urgent talks to secure a trade deal, saying most car firms were complaining of a lack of clarity to prepare for an end of the transition period.
Chief executive Mike Hawes said: ‘These figures are yet more grim reading for the industry and its workforce, and reveal the difficulties all automotive businesses face as they try to restart while tackling sectoral challenges like no other.
‘Recovery is difficult for all companies, but automotive is unique in facing immense technological shifts, business uncertainty and a fundamental change to trading conditions while dealing with coronavirus.
‘Our factories were once set to make two million cars in 2020 but could now produce less than half that number – a result of the devastating effects of the pandemic on top of already challenging market conditions and years of Brexit uncertainty.’
Pointing out that the EU was still the biggest market for UK cars, he added that the long-term future of the motor industry now depended on getting a good trade deal.
The industry was, he said, facing a ‘plethora’ of issues, including Brexit, recovery from the pandemic, plus measures to make vehicles more environmentally friendly, and sales during the plate-change month of September would be crucial in determining the future of the industry.
Without a positive trade agreement with the EU, and trading on World Trade Organisation terms with 10 per cent tariffs, the UK’s annual output could stay around 800,000 to 2025, an analysis by the SMMT suggests.
The report adds that there were still significant questions about the nature of trading conditions from January, with uncertainty over customs procedures, regulation and damaging tariffs causing ‘real concern’.
The lack of clarity was ‘severely hampering’ most car companies’ ability to prepare for the end of the transition period, said the SMMT.
Unite assistant general secretary Steve Turner said: ‘Buffeted by the twin forces of the coronavirus pandemic and the ongoing challenges Brexit poses to the sector, the future of the UK’s world-leading automotive sector and the thousands of well-paid and skilled jobs that come with it, is in doubt.
‘These historic lows in production show the industry is standing at a crossroads: Either the government leaves it to become a shadow of its former self or provides the support and investment needed for it flourish as a producer of the next generation of cleaner cars.
‘UK vehicle manufacturers have a vital role to play in the country’s, and indeed the world’s, transition to low carbon, but they cannot do this until the government lays the groundwork.’
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