UK car production suffers worst September in 25 years

Jill Petzinger
·Germany Correspondent, Yahoo Finance UK
·3-min read
BRIDGEND, WALES - SEPTEMBER 25: A pair of boots left by a Ford worker in their car parking spaces following their final shift on September 25, 2020 in Bridgend, Wales. The Ford plant in Bridgend, which opened in May 1980, will shut down for the last time today, bringing to a close four decades of production at the site. The closure, announced in June 2019, will see the loss of hundreds of jobs. (Photo by Matthew Horwood/Getty Images)
A pair of boots left by a Ford worker following their final shift on 25 September in Bridgend, Wales, UK. The Ford plant in Bridgend, which opened in 1980, shut down on 25 September after 40 years. Photo: Matthew Horwood/Getty Images

UK car production fell by 5% in September compared with the same month in 2019, to levels not seen since 1995, according to the Society of Motor Manufacturers and Traders (SMMT).

Car plants in the UK produced just 114,732 cars in September, which is 6,000 fewer units than the same month last year. The decline reflects broad consumer uncertainty in the face of second coronavirus lockdowns, and the possibility of the UK finally exiting the EU without a free trade deal in place.

“These figures are yet more grim reading for UK Automotive as coronavirus continues to wreak havoc both at home and in key overseas markets,” said SMMT chief executive Mike Hawes in a statement on Thursday.

“With the end of transition now just 63 days away, the fact that both sides are back around the table is a relief but we need negotiators to agree a deal urgently,” Hawes added. “With production already strained, the additional blow of ‘no deal’ would be devastating for the sector, its workers and their families.”

UK car production. Credit: SMMT
UK car production. Credit: SMMT

Production for the UK markets rose nearly 15% but only 3,400 cars rolled off the lines in September.

Exports fell -9.7%, to 87,533 units. While exports accounted for more than three quarters of the production, exports to the US last month were down -30%, and to China and the EU by -1.2% and 03.3% respectively.

Watch: What are negative interest rates?

READ MORE: Carmakers form CO2 emission pools to avoid hefty EU fines

The UK car industry has had a crushing year to date. In the first nine months, domestic car production was down by almost 36% from its 2019 levels, to just over 632,000 units. The forecast is for 885,000 this year, which would mark the first time since 2009 that production topped out at under 1 million, the SMMT said.

September was also the worst month for car sales in the UK in 20 years, with SMMT data earlier this month showing new car registrations in the UK dropped by 4.4% compared with the same month last year, to 328,041.

READ MORE: No-deal tariffs will cancel out UK's electric-car grants

The only bright spot in the September data was the uptick in battery-electric vehicles: BEV production was up 37% from the same month in 2019, and over three-quarters of them were exported.

The surge in BEV production may be short-lived without a free-trade deal with the EU. Were the UK to be subject to standard WTO tariffs of 10%, then British-made electric cars would be a more expensive purchase for EU consumers.

WATCH: UK auto sector feels cold from Brexit fears