Plan Insurance Blog

Car production numbers up for the first time in 15 months, but will this be enough?

Car production increased by 3.3% in August, with 92,158 units produced in the UK, according to SMMT figures. These number are encouraging, however the year-to-date volume is still down 17% compared to 2018.

The increase is due to the fact that some manufacturers (like BMW, Jaguar- Land Rover, Honda) brought forward their usual summer shutdowns to April, as the UK was scheduled to leave the EU on the 29th March. The loss in April resulted in the current 17% year-on-year deficit. It is the first time in five years that the production hasn’t reached 1 million vehicles by August (so far, only 866,918 units left the UK production lines).

Mikes Hawes, SMMT Chief Executive, said:

“While growth is always welcome, today’s figures mask the underlying downward trend and strengthening global headwinds facing the sector, including international trade tensions, massive technological upheaval and, in the UK, political and economic uncertainty.

“Softening of global demand is compounding the challenge to UK manufacturers for whom a ‘no deal’ Brexit would be a hammer blow.

“The mere threat of ‘no deal’ has undermined investment and the potential imposition of tariffs, border delays and additional administrative burdens would damage competitiveness.

“We now need parliament and government to redouble efforts to get a deal that maintains free and frictionless trade. Given the ongoing challenges and costs being incurred, there is not a moment to lose.”

Earlier this week, Hawes and other European automotive industry leaders signed a joint statement expressing their concerns about a potential ‘no deal’ Brexit.

If the latest figures are encouraging, though overall production levels are unlikely to go back to last year’s numbers. Particularly as some manufacturers (including JLR, BMW and Toyota) have already announced that they will have to shut down again later this year, to mitigate potential disruption from a no-deal Brexit.