British Car Manufacturing Has Declined Every Month For A Year

British Car Manufacturing Has Declined Every Month For A Year

British Car Manufacturing Has Declined Every Month For A Year

Car manufacturing in the UK has declined month after month for a year. That’s according to figures from the Society of Motor Manufacturers and Traders (SMMT).

A Dying Industry?

The decline of British car manufacturing now spans the course of an entire year, according to the SMMT. Back in May, the number of cars built in the country fell by a depressing 15.5%; leaving 116,035 vehicles rolling off of production lines. That’s 21,329 less than May 2018. As a consequence, the year-to-year figure for 2019 sits at 557,295. That’s down from 705,774 (21% higher). This, the SMMT says, is in part because of shut downs brought about by the anticipation of a March departure from the European Union. More specifically, the domestic market experienced a decline of 25.9% year-on-year. Meaning a fall from 29,932 in May 2018 to 22,180 in May 2019. This situation is just as bleak for the export market; which represents 80.9% of the automotive industry in the country. It experienced a decrease of 12.6%, falling from 107,342 to 93,855.

Mike Hawes, the Chief Executive at SMMT, has described the industry’s challenges as “seismic.” He said, “the ongoing political instability and uncertainty over our future overseas trade relationships, most notably with Europe, is not helping and, whilst the industry’s fundamentals remain strong, a brighter future is only possible if we secure a deal that can help us regain our reputation as an attractive location for automotive investment.” But it’s not just Brexit uncertainty that’s taking its toll. The industry is facing a series of mounting challenges and pressures. These include the likes of market stagnation in Europe, a slowdown in China, new regulatory measures and a general hostility towards diesel.

Investment Woes

For Hawes, the most troubling sign is the lack of investment in the automotive industry. As he explained,  “the most disturbing feature of the figures is about automotive investment. Last year, total automotive investment was £588.6 million for the year. The previous year was about £1.1 billion. The year before that it was about £1.6 billion. If you look at a running average over the last three or four years, it’s about £2.5 billion.” He went on to claim that investment has effectively come to a halt. He minced no words when appointing blame stating, “Brexit uncertainty has already done enormous damage to output, investment and jobs.” In addition, he ruled out a ‘no deal’ Brexit scenario that could have a positive outcome for the industry. Whilst Hawes doesn’t believe we’re at the point of irreversible damage, he claimed that we’re “very close…there’s exasperation…there’s an on-going uncertainty…We haven’t reached the point of no return but, at some point, you will reach it.”

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