UK car manufacturing falls -44.6% in August, SMMT figures reveal

UK car production declined -44.6% in August, according to SMMT figures, as efforts to ramp up production stalled amid the coronavirus crisis, and weak demand in key overseas markets compounded by a significant fall in output for UK buyers.

The performance also reflects an unusually strong August in 2019, when some plants worked through the customary summer maintenance shutdown period, instead pausing in April to mitigate the then possible ‘no deal’ Brexit on 31 March.

Production for UK buyers fell -58.3% in the month to just 7,795 units, while exports followed a similar pattern, declining by -41.1% with 43,244 vehicles produced for overseas markets. Almost 85% of all cars built in Britain in August were destined for countries around the world, underlining the importance of this trade to the sector and UK economy.

So far this year UK car production is down -40.2%, representing a loss of 348,821 units. Manufacturing output for the domestic market is down -46.0% in the first eight months, with exports falling -38.8%, but still taking the lion’s share of output.

So far this year UK car production losses due to the crisis have cost manufacturers more than £9.5 billion, losses that will be impossible to catch back.1 Meanwhile at least 13,500 jobs are known to have been cut across the entire UK automotive sector in 2020, with a recent SMMT member survey highlighting that one in six auto jobs are at risk of redundancy when the current job support scheme ends.2

Mike Hawes, SMMT chief executive, said: "These are increasingly disturbing times for UK car makers and suppliers with the coronavirus crisis weighing heavily on the sector. Companies are bracing for a second wave with tighter social and business restrictions making the industry’s attempts to restart even more challenging. The UK industry is fundamentally strong and agile, and the measures announced yesterday by the Chancellor are welcome and essential, although we await more details of how they will work for all businesses and crucially large manufacturers.

"Companies need to retain skilled jobs and maintain cashflow and we may need more support to boost business and consumer confidence later this year. Moreover, with fewer than 100 days until the Brexit transition period ends, we need urgent agreement of an ambitious free trade deal with our largest market to avoid the second shock of crippling tariffs."