UK car production slumps to lowest May figures since 1946

Car production fell by 95% in May, with just 5,314 vehicles being built at UK factories, according to new figures.

The Society of Motor Manufacturers and Traders (SMMT) said output was a slight improvement on April, when only 197 cars were built, but with factories still closed or running at reduced capacity, it still marked the worst May since 1946.

Around two-thirds of the UK’s automotive plants started getting back to business last month, but capacity was severely held back by social distancing requirements and reduced demand.

The trade body said that with key global markets only just beginning to reopen and the UK remaining in lockdown, 4,260 cars were exported in May, most into the EU, the US and China.

Only slightly more than 1,000 cars were built for domestic buyers.

In the first five months of the year, UK factories built 324,763 cars, a decline of 41.7% on the same period in 2019 and a loss of more than 230,000, with the full year outlook now expected to be fewer than one million units.

The SMMT said its latest research showed that liquidity was still a major issue for automotive businesses despite the “lifeline” provided by the Government’s support schemes.

Up to one in six jobs is at risk of redundancy when the furlough scheme comes to an end in November, the SMMT warned.

Chief executive Mike Hawes said: “May’s figures are yet more evidence of why the UK industry, like its global rivals, needs dedicated support to drive a successful restart.

“Government assistance so far has been vital in keeping many businesses afloat, but the job isn’t done. Measures to boost cashflow, including additional and tailored finance schemes, tax relief and business rates deferral would deliver immediate results when liquidity is most acute.

“We have to retain the highly skilled jobs the sector provides but also ensure the business conditions are competitive so we can unlock the investment that will drive long-term recovery – a green recovery – which is inextricably linked the sector’s success.”

The SMMT added that with the automotive industry already hit hard by the Covid-19 pandemic, it cannot withstand a second shock of a hard Brexit.

The imposition of tariffs, customs duties and disruption at the end of the transition period would be “devastating”, it warned.

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