Automotive Land Rover car factory

Published on May 1st, 2020 | by Hammer

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British car production falls 37.6% in March

Car production in Britain fell 37.6 percent in March this year, which ended with the country in lockdown amid the Covid-19 pandemic. This means, the April 2020 figures which have not been released yet will be much more alarming.

Almost 50,000 fewer cars left factory gates compared to the same month last year, according to figures released recently by the Society of Motor Manufacturers and Traders (SMMT). The total was 78,767 which is down 47,428 as the coronavirus caused UK car plants to close, resulting in more than 140 days-worth of total production lost.

Land Rover car factory

The lockdown came into effect on 23 March, raising the possibility that the figures for April could be even worse and the updated figures will be coming in a few days. The sector has already been hit hard in the last year, with concerns and issues surrounding Brexit linked to many consecutive months of falling production.

In March, output for the UK domestic market declined 36.8 per cent, while exports fell 37.8 per cent as showrooms closed around the world. Demand was particularly weak in major export destinations including the US and EU, where many key markets were shut for the majority of the month. Shipments to China increased 2.3 per cent as lockdown measures there began to ease, but overall output for the sector was down 13.8 per cent for the first quarter, with 319,252 vehicles leaving factory gates compared with 370,289 in the same period in 2019.

The crisis could result in 257,000 fewer cars produced this year across all UK plants if factories stay closed to the middle of May, the SMMT said. That would amount to an estimated cost to industry of about £8.2bn, equivalent to roughly 20 per cent of UK car manufacturers combined annual turnover. The organization said the outlook could be much worse if subsequent demand is weak, and the speed at which production lines are able to ramp up is constrained. The body called for car retail premises to “open as soon as the situation allows”.

Any efforts to re-open major parts of the economy will be tightly controlled, amid fears that easing lockdown measures could lead to a second peak in infections.

SMMT chief executive Mike Hawes said: “UK automotive is fundamentally strong but, as these figures show, it is being tested like never before, with each week of shutdown costing the sector and economy billions. Government’s emergency measures are helping keep many companies afloat and thousands of people in jobs, but liquidity remains a major concern and will become even more stretched as the industry begins to restart.

“To get production lines rolling, we need a package of measures that supports the entire industry. We need co-ordination and collaboration with government, the workforce and wider stakeholders to unlock the sector in a safe and sustainable way. This will include new workplace guidance, additional measures to ease cash-flow and help furloughed colleagues back to work, as well as demand-side measure to help encourage customers back into the market. This should be seen as long-term investment into the underlying competitiveness of an industry critical to the health of the economy and the livelihoods of thousands of households right across the UK.”

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