UK car production falls as Covid-19. hits exports

UK car production fell 18% in October as Covid-19 and fresh lockdowns reduced demand in important markets, industry figures showed.

The number of cars leaving factories fell by 24,490 to 110,179 from a year earlier as weak demand in the US and Europe caused exports to drop 19%, trade body SMMT said.

Shipments to the US and EU both fell 26% while production for the UK market dropped 13.6% with 2,9212 fewer cars made for purchase by British motorists. Exports to Japan rose 57% and to China by 9.7%.

The October figure meant output so far in 2020 was a third lower than a year earlier resulting in 379,308 fewer cars being made. SMMT released the figures with the UK and EU at an impasse over a post-Brexit trade deal and with Britain planning to ban new petrol cars by 2030.

SMMT said failure to agree a trade deal by 31 December would cost the industry up to £55.4bn in production losses over five years. Nissan denied a report this week that it planned to shut its Sunderland plant but doubts still hang over the UK car industry, whose main market is the EU.

Mike Hawes, SMMT's chief executive, said: "These figures are yet more bad news for an industry battered by Covid, Brexit and, now, the unprecedented challenge of a complete shift to electrified vehicles in under a decade.

"We must have a Brexit deal, one with zero tariffs, zero quotas and rules of origin that benefit existing products and the next generation of zero emission cars, as well as a phase in period that allows this transition to be ‘made in Britain’.”

Hawes said a "bare-bones" trade deal would cost the sector £14.1bn. For the car industry Brexit is about damage limitation rather than new opportunities and with 35 days left until the deadline clarity is needed urgently, he said.