Car production falls again amid subdued demand in UK and overseas

The number of cars built in the UK fell by almost a fifth last month compared to a year ago, new figures reveal.

Just over 110,000 models left factories, down by 24,490, or 18.2%, on October 2019, said the Society of Motor Manufacturers and Traders (SMMT).

The impact of coronavirus and fresh lockdowns in the UK and overseas subdued demand for new cars in many key markets, said the trade body.

October’s decline was driven largely by falling exports, particularly to the EU and United States.

Shipments to the US fell by 26% and to the EU by 25.7%, said the SMMT.

Major Asian markets fared better, with exports to Japan and China up 57.1% and 9.7% respectively, reflecting less stringent lockdown measures, but this was not enough to offset losses elsewhere.

Production for the domestic market fell, by 13.6% to 18,629 units, with 2,921 fewer cars made for buyers in the UK than a year earlier.

October’s performance rounds off an “extremely tough” 10 months for UK car makers and suppliers, with production down by 33.8% since January, to 743,003 units, a year-on-year shortfall of 379,308 units worth around £10.4 billion, said the SMMT.

Chief executive Mike Hawes said: “These figures are yet more bad news for an industry battered by Covid, Brexit and, now, the unprecedented challenge of a complete shift to electrified vehicles in under a decade.

“While the sector has demonstrated its resilience, we need the right conditions to remain competitive both as a manufacturing nation and a progressive market.

“Yesterday’s Spending Review recognised the need to invest in a green industrial revolution, but this must be at globally competitive levels and equal to the scale of ambition to keep this sector match fit.

“Above all, we must have a Brexit deal, one with zero tariffs, zero quotas and rules of origin that benefit existing products and the next generation of zero emission cars, as well as a phase-in period that allows this transition to be ‘made in Britain’.”

The SMMT has warned that in the event of leaving the EU without a trade deal, car production losses could cost as much as £55.4 billion over the next five years.