UK car production hits a 17-year high as industry body issues fresh Brexit warning

Mike Hawes, chief executive of the SMMT, said that Brexit risks 'destroying this success story' 

Josie Co
Business Editor
@JosieCox_London
Wednesday 26 April 2017 16:48
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More than 30 manufacturers build in excess of 70 models of vehicle in the UK, according to the SMMT, supported by more than 2,000 component providers
More than 30 manufacturers build in excess of 70 models of vehicle in the UK, according to the SMMT, supported by more than 2,000 component providers

British car makers produced more vehicles in March than during any month in 17 years, fuelled by robust demand from abroad, industry figures show.

Data from the Society of Motor Manufacturers and Traders published on Thursday, reveals that one car was exported every 20 seconds in March and export demand was up 10.6 per cent on the previous year.

As a result of that, a total of 471,695 vehicles were produced during the first three months of 2017, up 7.6 per cent on the same period last year and the biggest quarter for production since the first three months of 2000, when 490,648 cars were built in the UK.

“UK car manufacturing is accelerating thanks to billions of pounds of investment committed over the past few years,” said Mike Hawes, chief executive of the SMMT.

But he also reiterated the vulnerability of the UK car industry in the face of Brexit.

“Much of our output goes to Europe and it’s vital we maintain free trade between the UK and EU or we risk destroying this success story,” he said.

Because of the car industry’s global exposure and its dependence on workers from abroad, it is generally considered one of the most vulnerable to a hard Brexit and already in January Mr Hawes issued a stark warning, saying Brexit could damage the industry “beyond repair”.

Britain moving to a World Trade Organisation regime after Brexit could lead to the introduction of a 10 per cent tariff on finished vehicles and a 4.5 per cent tariff on component parts for cars.

In March, a research study done by PA Consulting showed that if manufacturers pass that cost directly on to customers – and taking all the stages of production into account – the price tag for a new vehicle could soar by as much as £2,372 per car, possibly hamstringing demand both domestically and from abroad.

According to the SMMT, the automotive industry currently accounts for more than £71.6bn in turnover.

Around 169,000 people are employed directly in manufacturing and 814,000 across the wider automotive industry, and the sector accounts for 12 per cent of total UK export of goods.

More than 30 manufacturers build in excess of 70 models of vehicle in the UK, according to the SMMT, supported by more than 2,000 component providers.

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