British car output hits the skids, falling at fastest rate since 2008 recession
UK car production has seen a sharp fall, the biggest since the 2008 financial crisis, with investment declining due to ongoing uncertainty over Brexit, according to an industry trade association.
British car output has fallen by 9.1% to 1.52 million units in 2015, representing a five-year low for the industry and the fastest rate of decline since the 2008 financial crisis, according to data from the Society of Motor Manufacturers and Traders (SMMT).
Overall output for UK and overseas markets has declined 16.3% and 7.3% respectively, with Brexit uncertainty leading to British automotive investment being halved in 2018 as forecasts predict that two-thirds of UK car trade is at risk if a Britain leaves the EU without a deal.
UK automotive sector on ‘red alert’ over Brexit
British carmakers are calling for UK lawmakers to rule out a no-deal Brexit after the SMMT published is latest output figures that show that significant declines for the second consecutive year, with the industry facing a myriad of challenges.
‘With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK Automotive is on red alert,’ SMMT CEO Mike Hawes said. ‘Brexit uncertainty has already done enormous damage to output, investment and jobs.’
‘Yet this is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the EU but with the many other global markets with which we currently trade freely,’ Hawes said.
‘Brexit is the clear and present danger and, with thousands of jobs on the line, we urge all parties to do whatever it takes to save us from ‘no deal,’ he added.
UK carmakers see inward investment slashed over Brexit concerns
Concerns over Brexit have also led to fresh inward investment in the UK automotive sector plummet, with the sector seeing a 46.5% decline on 2017 to just £588.6 million, the SMMT said.
British car exports to China have fallen 24.5%, while demand from EU markets slid by 9.6%, while domestic interest was down even further as registrations for UK-made cars plummeted 20.9% in 2018.
The decline in UK car manufacturing in 2017 and 2018 follows seven years of unprecedented growth for the sector as it emerged from recession faster than any other major EU market, with output rising more than 70% in that time.
Much of this success is due to our global competitiveness, drawn from economic and political stability, investment, a highly skilled workforce and beneficial trading conditions with our biggest markets.
As a highly-integrated sector that has maximised the benefits of the European single market and customs union, a ‘no-deal’ Brexit is the most significant threat to the competitiveness of the UK automotive sector in a generation.
IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.
This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.
Please see important Research Disclaimer.
Trading around Brexit
Find out how the UK’s exit from the EU continues to affect traders, and discover:
- The unique opportunities in a ‘hard’ and ‘soft’ Brexit
- The markets you should be watching
- Everything that’s happened so far
Live prices on most popular markets
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.