UK car manufacturing flat in February but SMMT estimates 18% drop in 2020 output

As the world tackles the impact of Covid-19 outbreak and with many countries in a state of limited or complete lockdown, British car manufacturing fell -0.8% in February as per the data released by the Society of Motor Manufacturers and Traders (SMMT). Output for domestic market climbs 7.8% while exports fell 3.1% to 94,999. For 2020, initial impact analysis suggests that this pandemic could lead to almost 18 percent drop in 2020 output going forward.  
Some 122,171 vehicles rolled off production lines in February, representing a loss of just over 1,000 units compared with February 2019. The decline was driven by slower demand in some key global export markets. In the month before the coronavirus pandemic started to be felt in the UK, global shipments fell 3.1% to just short of 95,000 units. Although combined EU demand rallied (up +3.6%), exports to the US and Asia fell substantially.

UK Car Output between February,2014-February, 2020

Meanwhile, there was positive news for the domestic market, where output rose 7.8%, with 27,172 cars produced. Year-to-date figures show a -1.5% year-on-year drop in overall production.

The figures come at a time of unprecedented challenge for the UK and its automotive industry, with all car manufacturing plants now on shutdown as the country focuses efforts on overcoming the crisis.

An initial assessment commissioned by SMMT of the potential impact of these shutdowns suggests a loss of around 200,000 units by the end of 2020, just under 1.1 million – a fall of 18%. However, the impact could be far more severe if the crisis, and therefore shutdowns, were to last for months instead of weeks.

Mike Hawes, Executive, SMMT Chief, said: “Despite the myriad global challenges, the UK automotive industry has faced in recent times, it remains fundamentally strong and February’s figures reflect that. However, these figures also reflect the calm before the storm. With UK car plants now effectively on national shutdown and many global markets closed, the outlook is of deep concern.”

The automotive industry is one of the UK’s most valuable economic assets, contributing some 18.6 billion pound sterling to the economy every year. Speaking about the UK Government’s emergency support package, Hawes highlighted the need to release immediate funding, “We wholeheartedly welcome government’s extraordinary package of emergency support for businesses and workers, but this must get through to businesses now. If we’re to keep this sector alive and in a position to help it get back on its feet, we urgently need funding to be released, additional measures to ease pressure on cashflow and clarity on how employment support measures will work.”