Home Business NewsBusinessAutomotive News UK car production down by 45 per cent due to Brexit shutdown

UK car production down by 45 per cent due to Brexit shutdown

by LLB Reporter
30th May 19 11:48 am

Car manufacturers have shutdown factory’s which was initially designed to cope with the disruption from the original 29 March Brexit date.

This has impacted on UK car production in April by 44.5% according to the Society of Motor Manufacturers and Traders (SMMT).

The SMMT called it “an extraordinary month” and just 70,971 cars rolled off the production lines, this amounts to 56,999 fewer cars than in April 2018.

Production was down for both home and the overseas market by 43.7% and 44.7% respectively.

Mike Hawes, SMMT chief executive said, “Today’s figures are evidence of the vast cost and upheaval Brexit uncertainty has already wrought on UK automotive manufacturing businesses and workers.

“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.”

Written by Markus Kuger, kead economist at Dun & Bradstreet said, “Although partly explained by factories being closed for repairs and servicing equipment earlier than usual due to Brexit supply chain concerns, the significant drop in car production in April is indicative of the wider uncertain economic climate in the UK.

“Manufacturers have traditionally relied on cross-border suppliers as well as exporting cars to the continent and decades of industry growth have led to the UK no longer being home to storied British nameplates.

“With a potential no-deal Brexit on the horizon, there is likely to be more challenges ahead for the largely foreign-owned UK automotive industry.

“The UK’s exit from the EU has already been blamed for the planned closure of the Honda plant in Swindon, a location that is estimated to create over 150,000 cars a year in the UK. Honda cited global shifts and investment in electric vehicles as the reasons, but the speculation points to Brexit as the true culprit.

“According to the latest Supply Risk Report due to be published by Dun & Bradstreet and Cranfield School of Management, Foreign Exchange Risk (the measurement of how at risk a sector is due to foreign currency fluctuations) in the manufacturing sector was at 42%; this is much higher than the average 28.5% across all sectors.

“One reason for the high level of risk in manufacturing could be that buying companies are looking to pay suppliers in different currencies to exploit changes in currency exchange, but this is a risky approach in the uncertain economic climate.”

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