Brexit could spell 'dark days' for UK car manufacturing, warns SMMT

The Society of Motor Manufacturers and Traders warned on Tuesday that Brexit could send British car production back to the "dark days of the mid-1980s" as production fell for the tenth month in a row amid the weakest level of first quarter activity since 2011.

The Society of Motor Manufacturers and Traders (SMMT) warned that if Britain were to opt for a 'hard Brexit' and fall back on WTO rules for a sustained period, output was forecast to fall around 30% on recent levels to just 1.07m units by 2021, a level consistent with the mid-1980s.

Conversely, a favourable Brexit deal and transition period could see UK car production hitting 1.36m units in 2019, down from 1.52m in 2018, before rising to 1.42m by 2021.

Mike Hawes, SMMT chief executive, said: "Despite the extension, the Brexit clock is still ticking and a devastating ‘no deal’ remains a threat. This new period of limbo does not end the havoc for industry, with investment stopped and expensive factory shutdowns moved to avoid a Brexit deadline that has itself now moved. Just a few years ago, industry was on track to produce two million cars by 2020 – a target now impossible with Britain’s reputation as stable and attractive business environment undermined."

Overall car production declined by 14.4% in March, falling for the 10th month in a row as 126,195 units rolled off factory lines, as manufacturing for home market dropped by 18.1% and output for export fell by 13.4% with demand from both Asian and European markets softening.

Despite the drop in UK exports, sales overseas increased their share of overall production year-on-year to 78.7%, which the SMMT said demonstrated "the crucial importance of free and frictionless trade".