UK car production in 16-year high but Brexit means future uncertain

UK automotive car manufacturing June 2016Car production in the UK rose more than 10% in June 2016, to 158,641 vehicles, helping make the first six months of 2016 a 16-year high.

But the SMMT has warned that, with Britain’s post-Brexit future position in Europe still far from clear, the future may not be so rosy.

Indeed, a survey by the trade organisation shows 57% of members believe Brexit will be a bad thing for their business; just 8.3% say it will be positive.

More than 3 in 4 cars built in the UK are exported and the majority go to Europe; what’s more, nearly 60% of parts fitted to UK-built cars are imported from Europe.

Uncertainty over trade deals between the UK and EU are thus a huge headache for automotive business leaders.

Built in Britain, sent overseas

UK automotive car manufacturing June 2016

The production figures show that although UK-market demand was up 7.1%, demand from export markets, predominately the EU, swelled 14.9% – 695,139 of the 897,157 cars built in Britain in 2016 were exported.

“The latest increase in production output is the result of investment decisions made over a number of years, well before the referendum was even a prospect,” said SMMT chief executive Mike Hawes.

“These decisions were based on many factors but, primarily, on tariff-free access to the single market, economic stability and record levels of productivity from a highly skilled workforce.

“To ensure the sector’s continued growth, and with it the thousands of jobs it supports, these must be priorities in future negotiations.”

Brexit concerns from UK automotive business leaders include:

  • 68.4%: Tariffs or other barriers between the UK and EU
  • 66.4%: Losing access to EU trade deals
  • 66.1%: Being bound by EU regulations in which they have no say
  • 59.7%: Uncertainty over EU workers in the UK
  • 63.6%: Losing access to EU skills market
  • 52.7%: Drop in sales
  • 46.1%: Fall in investment

The SMMT adds that, of its members surveyed, a quarter are still unsure about what impact the European Referendum results will have on their business. For them, it’s too early to say – meaning the developments in post-Brexit Britain in coming months will be significant.

Managing Director at @editorial_mr. Runs a bit. Loves the motor industry.

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