Widespread uncertainty causes 20% July drop in UK car production
The collapse in global demand for new cars caused by the coronavirus pandemic continued to drag on the UK automotive sector in the month of July, with car production down 20.8% compared to July 2019.
The latest data released by the Society of Motor Manufacturers and Traders (SMMT) shows that 85,686 vehicles were manufactured last month.
While production lines at nearly all of the UK’s car plants were rolling again, severe economic uncertainty surrounding the pandemic and social distancing measures at dealerships put a dampener on demand.
“As key global markets continue to re-open and UK car plants gradually get back to business, these figures are a marked improvement on the previous three months, but the outlook remains deeply uncertain,” said SMMT chief executive Mike Hawes.
The SMMT said earlier this month that new car registrations in the UK, which had ground to a halt in April and May, had increased in July. However, demand was down over 40% for the year to date.
READ MORE: New cars sales in UK rise as dealerships reopen
Hawes said that on top of battling a recession and a global pandemic, the automotive sector has “neither the time nor capacity to deal with the further shock of a ‘no deal’ Brexit.”
“The impact of tariffs on the sector and the hundreds of thousands of livelihoods it supports would be devastating, so we need negotiators on both sides to pull out all of the stops to ensure a comprehensive free trade deal is agreed and in place before the end of 2020,” Hawes said.
Cars produced for export fell by nearly 17%, while those made for the UK market fell a little over 37% in July from the same month a year ago.
German carmaker BMW (BMW.DE) announced on Wednesday (26 August) that it plans to cut around 400 jobs at its Mini plant in Oxford.
“The COVID-19 pandemic has resulted in a substantial impact on customer demand and, like other automotive manufacturers, our volume forecasts for 2020 have had to change accordingly,” a BMW spokesperson said.
READ MORE: BMW to cut 400 jobs at Oxford Mini plant as COVID-19 dents demand