Friday 29 May 2020 10:01 am

UK car industry flatlines as just 197 cars built in April

The UK car industry made just 197 cars in April as the shuttering of factories due to the coronavirus pandemic sent production flatlining. 

Total production dropped 99.7 per cent, with the lowest number of cars built in one month since the Second World War, according to new data from the Society of Motor Manufacturers and Traders (SMMT).

Read more: SMMT: UK coronavirus crisis wipes out April car sales

As a result of the historic stall, production for the year to date is down 27.6 per cent, with 121,811 fewer vehicles made this year compared to last.

The industry is now forecasting that it will manufacture less than 1m cars this year, lower than in 2009, and as a result suffer a loss of £12.5bn.

Just 45 of the 197 cars were built for customers in the UK.

Last April, production had itself collapsed 44.5 per cent to 70,000 as factories temporarily closed down in anticipation of a 31 March Brexit, which did not transpire in the end.

The SMMT’s chief executive Mike Hawes said: “With the UK’s car plants mothballed in April, these figures aren’t surprising but they do highlight the tremendous challenge the industry faces, with revenues effectively slashed to zero last month”.

KPMG’s head of automotive Andrew Burn said that the challenge for the car industry would be “contending with low volumes and fluctuating schedules.

“There is an expectation that many manufacturers will adopt a demand-led model, although this will continue to be impacted by uncertainty around volume – it is extremely unlikely that we’ll return to pre-COVID-19 levels for the significant future”, he added.

Although the automotive manufacturing industry, which employs 168,000 in the UK is now starting to return to work, Hawes warned that the sector would need support from the government to get through the “short-term turmoil”.

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

Speaking to City A.M. earlier this month, Hawes said that the industry would need government stimulus in order to jumpstart the sector and get demand going again.

“There will be some demand but we really want to see is a quick stimulus to demand to get people to consider buying cars,” Hawes said.

“Of course people’s livelihoods have been seriously threatened by what’s going on, but we need to get a quick boost in the market to get the wheels of manufacturing turning.”

Car showrooms are set to open on Monday as the government gradually eases back lockdown restrictions.

Seán Kemple, director of sales at Close Brothers Motor Finance, said that the car industry should be a focus for the government as the country moves out of lockdown:

Read more: Nissan weighing 20,000 job cuts as car sales struggle

” More than half of dealers have called on the Government to offer more support to car manufacturers, and there’s certainly an opportunity to ‘build back better’.

“And with the new 10% tax on EU-imported cars likely coming into play in 2021, UK plants will need to be equipped to meet even higher demand as we look to the long term”, he added.

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