Car industry on ’RED ALERT’ as Brexit uncertainty causes production CRISIS
THE UK car industry could be in crisis as the marker is on “red alert” following a decline in production a result of Brexit uncertainty, claims a new report.
Britain’s car industry could be in crisis as slumped last year as a result of Brexit uncertainty. The industry is on “red alert” since production dipped by almost a tenth in 2018, reveals a new report.
Investment in car companies also halved last year to £588 million as companies hold off making any decisions until trading arrangements between the UK and other countries become clearer.
The Society of Motor Manufacturers and Traders (SMMT) said investment had effectively "stalled" amid fears over the future of the UK’s trading with the European Union (EU).
Just 1.5 million cars left UK factories in 2018, which is a 9.1 per cent decline on the previous year and a six-year low.
Production of diesel vehicles declined by a whopping 22 per cent to 561,000 units over the same period of time as a result of the continued condemnation of the fuel type.
SMMT chief executive Mike Hawes described the decline in investment as “deeply depressing” and hopes it will spark politicians to secure a good Brexit trade deal.
He said: "With fewer than 60 days before we leave the EU and the risk of crashing out without a deal looking increasingly real, UK Automotive is on red alert.
"Brexit uncertainty has already done enormous damage to output, investment and jobs.
"Yet this is nothing compared with the permanent devastation caused by severing our frictionless trade links overnight, not just with the EU but with the many other global markets with which we currently trade freely.
"Given the global headwinds, the challenges to the sector are immense. Brexit is the clear and present danger and, with thousands of jobs on the line, we urge all parties to do whatever it takes to save us from 'no deal’.”
Car production fell by 16 per cent last year, and exports dropped by 7.3 per cent, including 9.6 per cent in Europe and 24 per cent in China.
Exports to Japan increased by 26 per cent and by 23 per cent to South Korea, but the SMMT pointed out that both countries were subject to preferential EU trade agreements.
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Mr Hawes added that car makers have been left not knowing what the fuel of the UK’s trading relationship with the EU will be after March.
He added that a no-deal would be a “catastrophe” for the car industry. He said: “Investors are asking what is going on, what is going to happen next. That is the definition of uncertainty."
A Department for Business, Energy & Industrial Strategy spokesman said: "As we leave the European Union we will seek the broadest and deepest possible agreement that delivers the maximum possible benefits for both the UK and EU economies and maintains the strength of our world-leading automotive sector.
"The automotive industry is a great UK success story, one we are working to grow through our modern Industrial Strategy, Automotive Sector Deal and research funding including millions for the creation of next-generation batteries."