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UK car production hits weakest 1st half since 1954 amid coronavirus hit

Christian Fernsby ▼ | July 31, 2020
British car production plunged by 42.8 percent in the first half (H1) of 2020 year on year, recording the weakest months since 1954, the Society of Motor Manufacturers and Traders (SMMT) said Thursday.
UK car factory
Weakest   UK car factory
Data revealed that British car production was 381,357 units in H1 amid the hard hit caused by the coronavirus pandemic.

Topics: Car

Meanwhile, at least 11,349 jobs have been cut in the pandemic across the industry, including manufacturing, supply chain and retail, with "more at stake without dedicated restart support as firms fear double whammy of Brexit tariffs", said the SMMT.

In June alone, car manufacturing output declined by 48.2 percent on the same month 2019, with 56,594 units produced, as "strict social distancing measures and weak demand across global markets continued to restrict output," said the SMMT.

"These figures are yet more grim reading for the industry and its workforce, and reveal the difficulties all automotive businesses face as they try to restart while tackling sectoral challenges like no other," said Mike Hawes, chief executive of the SMMT.

Hawes said recovery was difficult for all companies, but automotive is "unique in facing immense technological shifts, business uncertainty and a fundamental change to trading conditions while dealing with coronavirus."

The automotive organization urged Britain and the European Union (EU) to secure a free trade agreement (FTA) by the end of 2020, highlighting that uncertainty about "customs procedures, regulation and damaging tariffs" would be real concerns.

"New analysis suggests car production losses could total 1.46 million units by 2025 worth just over 40 billion pounds (about 52 billion U.S. dollars) if no FTA is in place by the end of 2020, forcing the sector to trade on WTO terms with full tariffs applied," said the SMMT.

The trade group said the lack of clarity "is now severely hampering nine in 10 companies' (93.5 percent) ability to prepare for the end of the transition period".

"The critical importance of an EU UK FTA is self evident for UK Automotive," said Hawes, as the sector has been suffering devastating effects of the pandemic "on top of already challenging market conditions and years of Brexit uncertainty."

"Its long term future now depends on securing a good deal and a long term strategy that supports an industry on which so many thousands of jobs across the country depend," he added.