British car production is down for the third consecutive year as weakened consumer and business confidence put the brakes on the industry.
Manufacturing fell 14.2 per cent last year to 1.3m units, according to the Society of Motor Manufacturers and Traders (SMMT), with a 6.7 per cent fall in December.
The trade association said output had hit its lowest point since 2010. It blamed weakened consumer and business confidence, as well as slow demand overseas and a shift away from diesel across Europe.
Mike Hawes, chief executive of SMMT said: “The fall of UK car manufacturing to its lowest level in almost a decade is of grave concern. Every country in the world wants a successful automotive sector as it is a driver of trade, productivity and jobs.”
Exports took a hit, falling 14.7 per cent, but overseas orders continued to account for more than eight in 10 cars built, totalling 1m units.
Shipments to the European Union fell 11.1 per cent but the SMMT said the bloc “remains the sector’s most important market with its share of exports rising by two percentage points to 54.8 per cent.”
The latest production outlook for the year has downgraded expectations to 1.27m units, down from the 1.32m forecast made in November.
To mitigate this decline, SMMT calls for an “ambitious UK-EU free trade deal that drives competitiveness, growth and prosperity.”
Earlier this month Hawes told chancellor Sajid Javid that the industry’s “priority” is to stay closely integrated.
SMMT welcomed the £1bn investment in the industry last year but noted it was from one company looking to expand electric vehicle production in the West Midlands.
The investment tally for last year was 60 per cent lower than the average £2.75bn over the past seven years.
The trade association said: “It’s clear that more must be done to encourage overseas investors to follow suit.”
The figures follow a difficult year for British car sales which slumped two per cent year-on-year to just 2.31m vehicles in 2019.