A move to temporarily halt car production in the runup to the original March 29 Brexit deadline slashed UK car production in April by almost half – the largest amount since Britain was in the midst of a recession.
Car production fell 44.5% year-on-year to 70,971 units last month, the sharpest fall since exactly 10 years ago when the global financial crisis hit, figures from the Society of Motor Manufacturers and Traders (SMMT) show.
The figure was 56,999 fewer than in April last year.
Car factories shut down last month to sidestep the risk of supply chain disruption from a potentially chaotic “no-deal” Brexit on the original date for Britain’s departure from the European Union.
While this was pushed back to Oct. 31, the postponement came too late for carmakers to change plans, prompting a “dismal” collapse in output, the SMMT said.
Prolonged instability has done untold damage, with the fear of 'no deal' holding back progress, causing investment to stall, jobs to be lost and undermining our global reputationMike Hawes
Global trade tensions exacerbated the decline.
“Today’s figures are evidence of the vast cost and upheaval Brexit uncertainty has already wrought on UK automotive manufacturing businesses and workers,” SMMT Chief Executive Mike Hawes said.
“Prolonged instability has done untold damage, with the fear of ‘no deal’ holding back progress, causing investment to stall, jobs to be lost and undermining our global reputation.”
Some 127,240 fewer cars have been built in the UK in the year to date, compared with the same period in 2018.
The SMMT estimated production for the whole of 2019 would be about 10% down on last year, but could pick up if a suitable deal between the UK and the EU allowed for a transition period to adapt to trade outside the single market.
Hawes urged the possibility of a ‘no-deal’ Brexit to be taken off the table to keep UK industry competitive globally.
Official data show business investment in Britain fell in every quarter of 2018 and grew only weakly early this year, leaving Britain’s economy reliant on consumer spending to drive growth.
Earlier this month, Bank of England Governor Mark Carney said business investment was likely to continue to be weak, but that there should be an improvement - and reduced reliance on consumers - if Brexit took place smoothly.
The manufacture of motor vehicles accounts for about 9% of overall manufacturing output in Britain, the world’s fifth largest economy.