Brexit fears help car production fall by more than a fifth, trade association says – Sky News

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Brexit fears help car production fall by more than a fifth, trade association says – Sky News

Car production fell by more than a fifth in the first half of 2019, according to a leading trade association.

The Society of Motor Manufacturers and Traders (SMMT) report that output dropped by 20.1% in the first six months of the year compared with the same period in 2018.

Their research suggests the fall is linked to lower demand in global markets and fears over a no-deal Brexit.

There have been 168,052 fewer cars built in UK factories. Manufacturing for domestic buyers is down by 16.4% and overseas orders have fallen by 21%.

Four out of five cars are exported.

June marked the 13th consecutive month of negative growth, with an overall decline of 15.2% that month.

However, some of the reduction is due to some manufacturers bringing forward their usual summer shutdowns to April. This was done under the previous Brexit deadline of March, which has since been moved to October.

SMMT chief executive Mike Hawes said the figures are “the result of global instability compounded by ongoing fear of no deal.”

Engineers working on a Jaguar V8 engine at Ford's Bridgend plant

Image:
Ford’s Bridgend plant will shutter next year

He said: “The fear of no deal is causing investors to sit on their hands. There is political uncertainty, there is economic uncertainty.

“The worst outcome would be no deal. That is what they fear. That is why they are not investing.”

The SMMT’s research found more than £330 million has already been spent by the sector on contingency planning for a no-deal Brexit.

The funds have been directed towards stockpiling materials, securing warehouse capacity, additional insurance and training in new customs procedures.

Earlier this year, Honda said it will close its Swindon factory in 2021 and Ford will shut its Bridgend engine plant in South Wales in September 2020, with 1,700 jobs lost.

Earlier this week, PSA, the owner of Vauxhall, issued a warning that production at its Ellesmere Port factory will stop if it becomes unprofitable post-Brexit.

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