Demand for British-built cars continues to fall in July

SMMT data shows UK car output declined by 11%, with production for home market down 35%

UK car production continues to decline in the face of market uncertainty and new emissions regulations, according to data released by the Society of Motor Manufacturers and Traders (SMMT). 

Car production across the country declined by 11% in July compared with the same period last year, with 121,051 units leaving factories.

Total exports fell by a more modest 4.2% year on year. However, the biggest drop was recorded in the number of new cars produced for the home market at 35%. Just 19,414 non-export models were produced, down from 29,872 in July last year and continuing a production slump from June. 

The SMMT attributes the significant July drop to an unusually high production number for 2017, boosted substantially by a raft of new models, such as the Swindon-built Honda Civic, going on sale. 

Several factors are said to be to blame regarding the overall drop in output, including preparations for the tough new WLTP emissions standards, model changes and seasonal adjustment. Market uncertainly over diesel engines — resulting in some manufacturers dropping diesel variants altogether — is also a contributor.

Despite the underwhelming monthly figures, the data shows that year-to-date production is largely in line with expectations. In January-July, 955,453 cars have left UK factories, representing a drop of 4.4% compared with the same period last year. 

Mike Hawes, SMMT chief executive, said that the industry was “undoubtedly feeling the effects of recent uncertainty in the domestic market” but drawing long-term conclusions was difficult.

“The bigger picture is complex and month-by-month fluctuations are inevitable as manufacturers manage product cycles, operational changes and the delicate balance of supply and demand," Hawes said. "To ensure future growth, we need political and economic clarity at home and the continuation of beneficial trading agreements with the EU and other key markets." 

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