Brexit Preparation Slashes UK Car Output
It has often been said that the economy is like a super-tanker, you can’t make a change and expect the course to shift immediately. The same is true of the car industry. Today, absolutely nobody knows when, or indeed if, the UK will leave the EU. Nobody knows what the terms of such a departure would be or, if a “no deal” Brexit should happen, if there will be any transitional period. Industry can’t wait until the situation becomes clear since (unless we remained in the EU or had a deal that granted a transitional period) it would have no time to react to circumstances which would be extremely costly.
The UK car making industry had to work on the assumption that the nation would leave the EU at the end of March without a deal – since the deal on offer plainly couldn’t make it through parliament. Consequently, manufacturers decided that they needed to halt or deeply scale-back production in April.
Vehicle production fell by 44.5% in April, according to figures from the Society of Motor Vehicle Manufacturers (SMMT). April 2019 saw 70971 cars produced, down by 56999 from the previous April. The cuts hit both vehicles intended for export and those for the UK market, down by 44.7 and 43.7%, respectively.
SMMT explained that manufacturers had brought forward summer stoppages (planned for the holiday period), increased stockpiling. Attempted to re-route logistics and instigated training in anticipation of new (undefined!) customs procedures.
In the event, Brexit has been postponed until (in principle) the end of October.
Mike Hawes, SMMT’s chief executive said: "Today's figures are evidence of the vast cost and upheaval Brexit uncertainty has already wrought on UK automotive manufacturing businesses and workers. Prolonged instability has done untold damage, with the fear of 'no deal' holding back progress, causing investment to stall, jobs to be lost and undermining our global reputation. This is why 'no deal' must be taken off the table immediately and permanently, so industry can get back to the business of delivering for the economy and keeping the UK at the forefront of the global technology race."