Brexit causes strong decline in UK car manufacturing

Brexit

The UK’s automotive industry has been struggling for months, but it hit a new low point in April when car production fell by 44.5% compared with the same period last year. This is the strongest decline in ten years, according to figures from the trade association Society of Motor Manufacturers and Traders (SMMT) in the UK.

Nearly 57,000 fewer cars were produced in April 2019 than in the same month in 2018. The decline is a direct consequence of the impending Brexit. Many automotive manufacturers have already decided to close their UK plants due to uncertainty about the supply chain impact of a possible ‘no deal’ scenario.

The United Kingdom’s departure from the European Union was originally scheduled for 29 March. The leaving date was pushed back to 31 October at the last minute, but by then it was too late for manufacturers to change their plans. This resulted in a sharp drop in production in April.

International reputation at stake

According to Mike Hawes, CEO of the SMMT, the new figures are evidence of the vast cost and upheaval Brexit uncertainty has already caused in the industry. “Investments have come to a standstill, threatening jobs and putting our international reputation at risk,” he says.

Hawes blames the damage mainly on the fear of a hard Brexit, and argues that the ‘no deal’ option should therefore be taken off the table immediately. Production is expected to increase again if the UK can reach agreement with the EU on the terms of withdrawal, in which case the damage could remain limited to a just over 10% decline compared with 2018.

Source: Trouw