Thursday 29 October 2020 8:48 am

UK car production hits lowest level since 1995 as industry calls for 'vital Brexit deal'

UK car production in September slumped to its lowest level since 1995, as the automotive industry urged ministers to strike a “vital Brexit deal” to secure jobs across the sector.

According to new figures from industry body the Society of Motor Manufacturers and Traders (SMMT), factories produced just 114,732 cars in September, marking a five per cent slump on the same period last year.

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So far, a mere 632,824 vehicles have been built in the UK in the first nine months of 2020, meaning UK car production has plummeted 36 per cent since 2019.

The latest independent outlook for the industry predicted that factories will make fewer than 885,000 cars this year — the first time volumes will have dipped below the one million mark since 2009.

SMMT chief executive Mike Hawes called on ministers to “urgently” agree a Brexit deal with the EU that prioritises the UK’s automotive industry.

“These figures are yet more grim reading for UK automotive as coronavirus continues to wreak havoc both at home and in key overseas markets,” said Hawes.

“With the end of transition now just 63 days away, the fact that both sides are back around the table is a relief but we need negotiators to agree a deal urgently, one that prioritises automotive, enhances innovation and supports the industry in addressing the global threat of climate change.”

SMMT analysis showed that leaving the bloc under cent World Trade Organisation (WTO) rules would incur a 10 per cent tariff on UK-made electric cars exported to the EU — the equivalent of around £2,000 per vehicle.

It comes after electric vehicle production was a rare bright spot on Britain’s automotive sheet in September. 

September production of the latest battery electric vehicles (BEVs) grew 37 per cent year-on-year, three-quarters of which exported to the EU and further afield.

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“As the UK looks to increase its zero emission vehicle production capability, tariffs would have the opposite effect, making the country a less attractive destination for international investment and severely damaging industrial competitiveness at the worst possible time,” SMMT said in a statement.

Earlier this year, the auto body warned that one in every six jobs in the sector could be slashed as a result of the pandemic. 

At least 11,349 job cuts have already been announced across the industry since the outbreak of the pandemic, including in manufacturing, supply chain and retail.

Hawes added: “With countries across Europe experiencing a surge in Covid cases, and with local lockdowns already in place across many parts of the UK and beyond, the final quarter of 2020 looks increasingly challenging.”