UK car manufacturing

on the brink

Jaguar XE in production at Solihull Land Rover factory

A STARK warning that UK car manufacturing is teetering on the brink came after new figures of plummeting domestic sales.

Alex Buttle, director of car buying comparison website Motorway.co.uk, said: "This is a stunning fall in domestic demand and pretty much sums up the last six months for an industry reeling from punitive diesel taxes andcrumbling consumer confidence.

"The fact that manufacturing levels fell just 4.6 per cent last month, when domestic demand dropped off a cliff, shows just how reliant we are on exports.

"And that's probably more worrying than faltering demand, as right now we have no EU trade agreement and zero clarity over trading agreements with countries outside the EU.

"The UK car industry is teetering on the edge, and the economic landscape is unlikely to improve in 2018 with Brexit uncertainty ramped up to another level."

UK car manufacturing fell 4.6 per cent in November, according to figures released by the Society of Motor Manufacturers and Traders (SMMT). A total of 161,490 cars left British factories last month, driven by overseas orders, which rose 1.3 per cent.

In November, exports reached their highest proportion of output this year at 85.0 per cent but production for the home market continued to falter, falling for the fourth month in a row. It dropped 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 nine per cent, resulting in overall output falling 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 domestic demand for new cars and, with it, production output. Whilst 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."

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