Electrified Powertrains Bright Spot in UK Car Slump

Paul Myles

TU-Editor

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30th January 2020

An increase in production of vehicles with electrified powertrains was the only silver lining to a slump in overall output by UK automakers.

While total car production fell -14.2% in 2019, to 1,303,135 units, production of alternatively fuelled cars rose, by 34.7% to 192,304 units, as global appetite for the UK’s electric, plug-in hybrid and hybrid offering continues. That said, most of the vehicles were for the export market, a situation that faces being choked off by the likelihood of the UK failing to secure tariff-free trade with the European Union when it crashes out at the end of the year without a trade deal.

According to figures released today by the Society of Motor Manufacturers and Traders (SMMT), a dismal year was rounded off with a -6.4% drop in December sealing a third year of decline. The society said output was affected by multiple factors, including weakened consumer and business confidence at home, slower demand in key overseas markets, a number of significant model production changes and a shift from diesel across Europe. Factory shutdowns in the spring and autumn, timed to mitigate expected disruption arising from the anticipated departure of the UK from the EU on 29 March and 31 October, also had a marked effect.

Manufacturing for domestic car buyers fell -12.3%, to 247,138 units, while exports also took a hit, down -14.7%, although overseas orders continued to drive volumes, accounting for more than eight in 10 cars built and totalling over one million units. Although shipments to the EU fell, by -11.1%, the bloc remains the sector’s most important market with its share of exports rising by two percentage points to 54.8%. Meanwhile, trade with the UK’s next largest markets, the US represented 18.9% of export volumes, China 5.3% and Japan 3.2% also fell, with exports down -9.8%, -26.4% and -17.7% respectively.

Mike Hawes, SMMT chief executive, said: “The fall of UK car manufacturing to its lowest level in almost a decade is of grave concern. Every country in the world wants a successful automotive sector as it is a driver of trade, productivity and jobs. Given the uncertainty the sector has experienced, it is essential we re-establish our global competitiveness and that starts with an ambitious free trade agreement with Europe, one that guarantees all automotive products can be bought and sold without tariffs or additional burdens. This will boost manufacturing, avoid costly price rises and maintain choice for UK consumers. Negotiations will be challenging but all sides stand to gain and this sector is up for it.”

Meanwhile, the latest independent production outlook downgrades expectations for 2020 to 1.27M units, down from the 1.32M forecast made in November.

— Paul Myles is a seasoned automotive journalist based in London. Follow him on Twitter @Paulmyles_