- A total of 127,051 cars were assembled at UK motor plants last month
- That's down from 152,611 in September 2017
- Domestic demand for home-built models fell by 19%
- More concerning was the decline of 16.2% in export demand - with 4 in 5 UK-made cars built for overseas markets
The number of cars being made at British factories plunged 16.8 per cent in September compared to the same time last year, new figures show.
The industry body said the decline was the result of new emissions regulations, model updates, trade tensions, uncertainty over diesel policy and Brexit.
A total of 127,051 cars were assembled at British motor plants in September, down from 152,611 in the same month a year ago.
Domestic demand for home-built models continued to dwindle, with production for the UK market down by 19 per cent.
However, it was a 16.2 per cent decline in outputs for export that will cause the most concern.
With four in five cars built in British factories sent overseas, the drop off in orders for foreign markets saw almost 20,000 fewer vehicles made last month.
The Society of Motor Manufacturers and Traders said there were various reasons for the slowdown in September production.
Stricter emissions rules required by the new Worldwide Harmonised Light Vehicle Test Procedure were partly blamed.
Becoming mandatory on 1 September, it forced certain carmakers across Europe to halt deliveries of some models that had yet to be re-certified under the new standards.
The SMMT said the sector was also still showing signs of concern regarding the industry's future following Britain's exit from the European Union.
Many manufacturers are already preparing potential backlogs caused by custom checks and new tariffs that could be imposed next year if London and Brussels fail to strike a Brexit deal, adding more costs and red tape for UK vehicle makers.
'It has been a turbulent year and the industry needs stability, something which appears elusive given the lack of resolution to Brexit negotiations,' said SMMT boss Mike Hawes.
'The UK government has recognised the importance of a deal that maintains free and frictionless trade with the EU, but it is up to all sides to deliver this to safeguard the hundreds of thousands of jobs depending on the sector.'
The sector has also suffered due to nosediving demand for diesel and was angered by a British government announcement ahead of next week's budget statement that subsidies offered to those buying plug-in hybrid vehicles will be cut.
Having planned for the Plug-in Car Grant rates to be slashed for electric cars and removed for hybrids on November 9, the government fast-tracked the reduced incentives to October 21 after seeing a spike in sales of low-emissions vehicles.
'Stability is also needed at home and a stronger UK new car market would go a long way to boosting manufacturing output,' Mr Hawes added.
'The Chancellor’s Budget next week is the perfect opportunity to stimulate the market, sending consumers and businesses the right signals to encourage the purchase of new cars, which would help bolster economic performance as well as delivering environmental goals.'
The SMMT's figures showed the drastic slow down in UK car production over the last two years
Alex Buttle, director of car buying comparison website Motorway.co.uk, said the results showed how dependent UK manufacturing is on a strong export market, and the significant decline in overseas demand was alarming.
'It's doubtful the rest of year will see a reversal of fortunes,'' he said. 'If anything, the situation could get significantly worse.
'Perhaps the most worrying trend is the drop off in domestic sales and the reliance on the export market.
'This puts the industry on shaky ground as we're still completely in the dark as to how the trading landscape will evolve post Brexit.'
Justin Benson, head of Automotive at KPMG UK, said it would be a 'pleasant and very welcome surprise' for manufacturers if the chancellor announced an incentive for consumers to buy low emission vehicles in the Budget on Monday having found that many Britons are holding back on buying new cars.
'Brexit and continuing uncertainty is making consumers think twice about making major purchases and KPMG's recent survey of the public in the event of a ‘no deal’ scenario found that almost half of the public expect to delay such purchases,' he said.
'While this means great offers on cars will continue, levels of consumer confidence are directly aligned to vehicle purchases.
'If there is certainty then confidence should increase, which will hopefully see an improvement in car production and sales.'
Source: https://www.thisismoney.co.uk/money/cars/article-6313911/UK-car-production-slumps-September.html