UK car manufacturing grows by 1.3% in May

UK car manufacturing grew by 1.3 percent in May, maintaining a rise in output that began the month earlier.

137,225 cars rolled off production lines last month, comfortably beating April’s 127,952 output – when a longstanding downward spiral in demand was finally halted with a 5.2 percent boost.

Despite the improvement, Society of Motor Manufacturers and Traders (SMMT) boss Mike Hawes said the numbers were helped by a “significant decline in output in May last year as several manufacturers geared up to deliver new models”.

This was the same reason provided for the UK’s growth in new car sales in May, when British motorists bought 192,649 cars, a 3.4 percent improvement on the same month in 2017.

Nevertheless, domestic demand for British-built cars actually surged by 12.8 percent to 29,918 units in May. But export demand fell by 1.5 percent to 107,307 cars, meaning cars sent abroad accounted for 78.2 percent of demand - 2.2 percent less than in May 2017.

The UK’s year-to-date output is now 2.9 percent down on the same period in 2017. Domestic demand for 2018’s opening five months was 6.3 percent down, while exports were 2 percent down.

Hawes highlighted ongoing Brexit negotiations as a cause for concern, stating that “We need to ensure that the UK car plants are able to attract future investment, and this will depend upon maintaining the competitive conditions that have helped drive the industry’s success in recent years”.

“Given our dependency on the EU as our biggest customer and supplier, that means retaining the benefits of the single market and membership of the customs union – the minimum requirement for frictionless trade,” he said.