An auto industry body said on Thursday that car production in UK has declined 9% in 2018, witnessing the biggest fall since the recession in 2008-9, and investment lowered by about half because of Brexit related fears.
Once a highly applauded sector, which politicians say has a rare manufacturing success story and employs around 850,000 people in UK, continue to witness company spending, sales, and output slump since the year of Brexit referendum, 2016.
According to the Society of Motor Manufacturers and Traders (SMMT), volumes have also been affected due to the growing restrictions on diesel, stern emission regulations hampering supply and a slowdown in China, which is the no. 1 autos market in the world.
UK, the fifth-largest economy in the world is due to leave the European Union, the largest trading bloc globally, without reaching on any kind of deal on March 29, following Britain lawmakers’ disapproval on the deal proposed by Prime Minister Teresa May. Manufactures are afraid of the looming Brexit, which could cause major disruption.
In 2018, the auto industry in UK witnessed the biggest fall in production due to a slump of roughly a third in 2009, prompted by the financial crisis and the investment decline to 589 million pounds which left it at the lowest level since the SMMT began compiling figures in 2012.
While pleading the government to avoid no-deal Brexit, SMMT Chief Executive Mike Hawes said that the uncertainty surrounding the Brexit has already damaged the investment, output, and jobs, significantly.
However, he added that this is nothing in comparison to the permanent damage caused by severing their frictionless trade links overnight, that too not only with the EU but with numerous other worldwide leading markets with which they trade freely. The production output is likely to witness a further 3% decline in 2019 due to the Brexit.
Jaguar Land Rover, UK’s biggest carmaker, being badly hit by a slump in demand from China and for diesel models, witnessed a 15.6% decline in domestic output, whereas Nissan, which runs the biggest car factory in UK fell by 10.7%.
Mohit Loshali, an experienced campaigner, writes about the latest evolutions and trends in the automotive and allied domains. He has helped clients from across the globe with his thought-provoking research and analysis.