Renewed shutdowns of car plants around the previously expected Brexit date of 31 October contributed to a further decline in UK car manufacturing in November.
Output slumped by 16.5% compared with the same month a year earlier, with 107,753 units produced, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT).
UK car production has fallen for 17 of the past 18 months and dropped by 14.5% during the first 11 months of the year, as the industry continued to face a series of challenges, including weaker consumer and business confidence domestically, lower demand from overseas markets and a slump in sales of diesel vehicles.
Jaguar Land Rover, BMW and Toyota stopped production at their British factories for several days in November to decrease potential disruption from a no-deal Brexit.
This was the second stoppage in a year for some plants, following the first in April around Britain’s original scheduled EU departure date, which led to a 44.5% production fall that month. The SMMT has calculated the cost to carmakers of implementing Brexit contingency measures to be more than £500m.
About 80% of cars made in the UK are exported, with the EU still the largest overseas market and destination for more than half of exports. The UK car industry employs more than 800,000 people and wants to work with the new government “to deliver an ambitious trade deal with the EU”, said the SMMT chief executive, Mike Hawes.
He added: “To ensure our competitiveness at a time of dramatic technological change, that deal needs to be tariff-free and avoid barriers to trade, which, for automotive, means that our standards must be aligned.”
The automotive industry has repeatedly voiced concerns about the possible effects of Brexit, especially a no-deal departure. Delays due to border checks or disruption to just-in-time deliveries of car parts could bring factory lines to a standstill. Carmakers also fear the possible imposition of tariffs, which could be as high as 10%.
The past year has been disappointing for the UK car industry, with several foreign-owned carmakers moving production out of Britain. In February, Honda announced the closure of its Swindon factory, while Nissan ended the production of its Infiniti model in Sunderland.
The French carmaker PSA, which has agreed a £38bn merger with Fiat Chrysler, has previously warned it could stop producing Vauxhall vehicles at its Ellesmere Port factory in Cheshire, which employs 1,100 people, if the plant became unprofitable after Brexit.
Stuart Apperley, the head of UK automotive at Lloyds Bank Commercial Banking, said “carmakers must think strategically about how to ensure the UK remains a good place to invest” as the new Brexit deadline of 31 January approaches.
“They could do this by strengthening their ties to universities to make sure they have the strongest possible talent pool to choose from, or increasing their commitment to research and development facilities,” he said.
In 2020, carmakers will be promoting the electric vehicles in their ranges in an attempt to increase sales.
