Exports drive UK car manufacturing in November as domestic demand falters

10:44 am, December 22, 2017

UK CAR manufacturing fell by 4.6 per cent in November, according to new figures from the Society of Motor Manufacturers and Traders.

A total of 161,490 cars left British factories last month, driven by overseas orders, which rose by 1.3 per cent.

In November, exports reached their highest proportion of output this year at 85 per cent but production for the home market continued to falter, falling for the fourth month in a row. It dropped by 28.1 per cent – the largest decline in 2017, as consumer confidence decreased and speculation over negative government policies towards diesel affected the market.

Year-to-date, more than 1.5 million cars have rolled off production lines, with nearly eight out of 10 destined for one of 160 global markets. While export volumes remain stable, production for the home market is down by nine per cent, resulting in overall output falling by two per cent since January.

Mike Hawes, SMMT chief executive, said: ‘Brexit uncertainty, coupled with confusion over diesel taxation and air quality plans, continues to impact on domestic demand for new cars and, with it, production output.

‘While it is good to see exports grow in November, this only reinforces how overseas demand remains the driving force for UK car manufacturing. Clarity on the nature of our future overseas trading relationships, including details on transition arrangements with the EU, is vital for future growth and success.’

Avril Webster, head of sales and marketing at AA Cars, said: ‘Domestic demand for new cars is down for a 10th consecutive month. Such a sizeable drop-off is unprecedented and an indication that a lack of clarity over air quality plans and uncertainty around Brexit is weighing heavily on consumer appetite.

‘It’s clear that consumers are crying out for clarity. Anyone who was holding out for such in the Budget will have been sorely disappointed.

‘The chancellor’s plans to increase the first-year VED rate on diesels that don’t meet the standards for next-generation clean diesels puts even more pressure on consumers and manufacturers in a year that has already dented the market.

‘This confusion has been exacerbated by rising inflation and increasingly squeezed living costs, meaning consumers are most cautious about splashing out on big-ticket items.’