UK car production suffers as Chinese exports crash

British car production fell in January, as demand from China collapsed and Brexit concerns weighed heavily at home.

UK factories turned out 120,649 cars, a 18.2% decline on the previous January and the eighth successive month of decline, according to the Society of Motor Manufacturers and Traders.

Exports fell 21.4% to 93,781 units, dragged down by a 72.3% slump in output destined for China and 20% decline in exports to the 27 European Union member states.

Manufacturing for the domestic market declined 4.8%, “as political uncertainty continued to dent consumer confidence,” said the SMMT.

The car industry is battling a number of headwinds, including a slowdown in China’s once red-hot economy, diesel cars falling out of fashion and Brexit. A third of companies surveyed by the trade body said they had postponed or cancelled UK investment decisions because of Brexit, with one in five claiming that they had lost business as a consequence.

Mike Hawes, SMMT chief executive, called another month of production decline “a serious concern”.

He continued: “The industry faces myriad challenges, from falling demand in key markets, to escalating global trade tensions and the need to stay at the forefront of future technology. But the clear and present danger remains the threat of a no-deal Brexit, which is monopolising time and resources, undermining competitiveness.”

There was, however, better data from manufacturers of commercial vehicles, such as vans, trucks and buses. Output jumped 49.1% to 9,182 units as demand from overseas and domestic markets rose 25.3% and 97.4% respectively. Hawes said model changes and a number of large fleet orders had had "big impact on this small volume sector".