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UK car output falls 1% on slower domestic demand

Nissan has agreed to build new models at its Sunderland plant in the UK (shown).


November 24, 2016 10:41 CET

LONDON — The UK made fewer cars last month for the first time in more than a year as output fell 1 percent, driven by slower domestic demand. The drop prompted the industry’s lobby group, the Society of Motor Manufacturers and Traders, to renew its call for the government to maintain free trade as Britain prepares to leave the European Union.

Overall output fell to 151,795 units in October, the SMMT said in a statement today, although year-to-date volumes rose 9.2 percent to 1.44 miliion, remaining on course to beat the 10-year high achieved in 2015.

Demand for the 81 percent of UK-built models that were exported rose marginally in October, but there was a 11 percent drop in the output destined for British buyers.

The SMMT said that model changes, which can reduce output as manufacturers phase out older products and bring in newer vehicles, had an effect on the monthly figures.

But separate car registration figures show that overall sales growth has slowed since the June 23 referendum and rising business demand has compensated for a fall in sales to individuals in every month since April.

The UK’s overwhelmingly foreign-owned car industry backed EU membership ahead of the vote and Nissan Motor Co., which operates the country’s largest plant, sought guarantees that its cars would not face tariffs before committing to a major investment.

SMMT CEO Mike Hawes said in the statement that the data showed the need for the government to guarantee that it would not become more expensive to sell UK-made vehicles abroad.

“It is crucial that British-built cars remain attractive to international buyers and exports are not subject to additional tariffs, costs and other barriers to successful trade,” he said.

In addition to Nissan, Toyota, and Honda are among automakers that manufacture cars in the UK, along with BMW Group’s Mini and Rolls-Royce brands, Volkswagen Group’s Bentley, Tata’s Jaguar Land Rover and General Motor’s Vauxhall unit.

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