Thursday 30 April 2020 12:01 am

SMMT: UK car production falls 38 per cent, 10 times worse than Brexit drops

The coronavirus crisis hammered British car manufacturing in March, with the total number of vehicles produced falling 37.6 per cent compared to a year ago.

Just 78,767 vehicles left factory gates last month, according to the Society of Motor Manufacturers and Traders (SMMT). That is 47,428 fewer than the previous year, as the coronavirus crisis caused UK car plants to close.

Read more: Nissan set for first loss since 2008 financial crisis

By comparison, at the height of Brexit uncertainty in October 2019, car production fell a comparatively fractional 3.8 per cent.

Output for the domestic UK car market declined 36.8 per cent, the SMMT said. And exports fell 37.8 per cent as the pandemic forced showrooms to close around the world.

In a rare bright spot, UK car producers’ shipments to China increased 2.3 per cent. The steady lifting of China lockdown measures proved to be the catalyst for that.

Suspended production and shuttered showrooms have devastated the UK car market. The latest data from Auto Analysis showing that the UK could lose 257,000 units this year if plants remain shut until mid-May.

This will cost the industry £8.2bn in total, 20 per cent of UK car makers combined revenue.

Car manufacturers running out of road

The figures lay out in stark detail the damage coronavirus is doing to the domestic UK car industry.

Half of all UK car manufacturers have suffered over 50 per cent drops in revenue, they told an SMMT survey.

Over 60 per cent of the full-time car manufacturing workforce have been placed on the government’s job retention scheme.

Listen to our daily City View podcast as we chart the economic fallout and business impact of the coronavirus pandemic.

Less than one in five UK car producers win CBILS loan

Over a quarter of firms have said they have cash reserves of less than three months. But only 17 per cent of applicants have received funding from the government’s business interruption loans scheme.

Of those companies which have applied, 58 per cent have said that they are ineligible or unsuitable for funding.

Over half – 57 per cent – of all businesses responding to the SMMT’s survey said they plan to resume operations by mid-May. But there are some key challenges that need to be overcome. 

The SMMT’s chief executive Mike Hawes said: “UK automotive is fundamentally strong but, as these figures show, it is being tested like never before, with each week of shutdown costing the sector and economy billions. 

“Government’s emergency measures are helping keep many companies afloat and thousands of people in jobs. But liquidity remains a major concern and will become even more stretched as the industry begins to restart.

“To get production lines rolling, we need a package of measures that supports the entire industry. We need coordination and collaboration with government, the workforce and wider stakeholders to unlock the sector in a safe and sustainable way”.

UK car industry ‘faces biggest crisis’ since Second World War

The global car industry is currently undergoing the “biggest crisis since the Second World War”, said Ana Nicholls, director of industry operations at the Economist Intelligence Unit.

“In almost every market overall new vehicle sales slumped in March, with April likely to be even worse and future demand still very uncertain. 

Read more: Peugeot maker PSA sales slump as coronavirus crashes car market

“Even as production restarts, it is likely to be at relatively low levels, both because of the need for social distancing and because demand is so low. 

“We are not expecting a strong recovery, particularly in Europe and the US, although the Asian market should be more robust”.