“The outlook for the full year is now 880,000 units, which puts us below a million for the first time since the heights of the recession in 2009, and back to a level that was last consistently seen back in the 1980s,” said Hawes.
June’s figures do mark an upturn from April and May, during which just 5511 cars were made. However, Hawes also conceded that stock produced but ultimately unsold for the peak sales month in March was still filtering through the retail system, constraining the need to ramp up production in some quarters.
Ongoing concerns lead to renewed call for Brexit clarity Typically more than 80% of UK-produced cars are exported – although that figure is currently closer to 90% – with the majority, at 56%, heading into the EU. The US, China, Japan and South Korea are also significant export markets.
With post-Brexit trading terms with Europe set to begin on January 1, 2021, but yet to be revealed, Hawes stressed the urgent need for clarity in order for the industry to thrive again in future.
“The critical importance of an EU-UK free trade agreement is self-evident for UK Automotive,” said Hawes. “Our factories were once set to make two million cars in 2020 but could now produce less than half that number, a result of the devastating effects of the pandemic on top of already challenging market conditions and years of Brexit uncertainty.
“This industry has demonstrated its inherent competitiveness and global excellence over the past decade. Its long-term future now depends on securing a good deal and a long-term strategy that supports an industry on which so many thousands of jobs across the country depend.”
The SMMT also released details of a survey of its members, made up of automotive firms in the UK, revealed that 93.5% of them feel a lack of clarity is now severely hampering their ability to prepare for the end of the transition period. 61.3% said Covid-19 has diverted resources away from Brexit preparations, while 77.4% viewed securing a tariff and quota free FTA as crucial to their future success
Without a free trade agreement, instead operating to WTO terms, SMMT-promoted analysis suggests that production could remain at around 800,000 cars a year, meaning 1.46m less cars would be made in the UK between now and 2025, with a lost value of more than £40bn.