Experts warn UK car industry losing ‘billions’ as production falls by almost 40 percent

Experts warn UK car industry losing ‘billions’ as production falls by almost 40 percent

SMMT data revealed a 37.6 percent drop in vehicle manufacturing output in March 2020 compared to the same time last year. The fall accounted for over 55,000 less vehicles produced over the month than the previous year as the true scale of damage is revealed. 

A total of 126,196 models rolled off production lines in March 2019 but total production fell to just 78,767 this time around. 

The fall takes into account a drop in production for the home market and in vehicles being exported to other nations. 

The sudden decline is 10 times worse than the decline the market experienced during Brexit uncertainty last year. 

SMMT data also revealed a 41.8 percent drop in commercial vehicle manufacturing in March 2020 while engine production was also down. 

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“Government’s emergency measures are helping keep many companies afloat and thousands of people in jobs, but liquidity remains a major concern and will become even more stretched as the industry begins to restart.

“To get production lines rolling, we need a package of measures that supports the entire industry. 

“We need coordination and collaboration with [the] government, the workforce and wider stakeholders to unlock the sector in a safe and sustainable way.”

Mr Hawes added new workplace guidelines and additional measures were needed to encourage customers back to the market.

He claimed any updates would be seen as long-term investment into the industry which is worth around £101 billion in global trade. 

Experts have warned the industry could suffer by up to £8.2billion if car factories do not start to lift their restrictions by mid May.

This is because 2020 output levels will fall by over a quarter of a million units which will cause devastation to many firms. 

The crisis has already led to more than 150 days of lost production as films were forced to shut up shop as the virus began to spread.

A survey conducted by the SMMT revealed 57 percent of businesses said they plan to resume operations by the mid May target. 

However two thirds of firms have highlighted readiness among consumers is needed for firms to get back to full production. 

New car registration declined by 44 percent in March in a fall even steeper than the financial crisis. 

Total sales for March 2020 were more than 200,000 units lower than the same time last year as dealers failed to capitalise on traditionally one of the strongest sales months of the year. 

The SMMT has claimed the government may need to jumpstart the UK car market to increase demand for vehicles. 

There are fears money may be tight after lockdowns are lifted which may lead to many to reconsider whether a new car purchase is necessary. 

Published at Mon, 04 May 2020 10:44:00 +0000