SMMT predicts ‘severe’ coronavirus impact on UK manufacturing

British new car production fell only slightly in February, but the SMMT has warned of a much sharper drop in output as a result of the coronavirus outbreak.

Figures released today by the SMMT, the UK motor industry’s body, show that 122,171 new cars were built last month, a drop of 0.8% compared with January. The fall has been attributed by the SMMT to “slower demand in key global export markets”.

Reduced demand from the US and Asia meant new cars built for export fell by 3.1% to fewer than 95,000 units, despite a 3.6% increase in units shipped to the EU.

However, the figures were bolstered by a resurgence in domestic demand, which climbed by a significant 7.8%, with 27,172 cars built for the home market. Overall, new car production in February fell 1.5% year on year.

The SMMT said the figures come “at a time of unprecedented challenge for the UK and its automotive industry”, as nearly all British vehicle manufacturers have paused production in an effort to stem the spread of the coronavirus.

The organisation estimates that the shutdown could mean the UK produces 200,000 fewer cars in 2020 than in 2019 – a drop of -18% – but has warned that the impact could be “far more severe” if the shutdown continues for several months. The government must, the SMMT said, accelerate access to emergency financial support for all businesses.

SMMT chief executive Mike Hawes said: “Despite the myriad global challenges the UK automotive industry has faced in recent times, it remains fundamentally strong and February’s figures reflect that. However, these figures also reflect the calm before the storm.

“With UK car plants now effectively on national shutdown and many global markets closed, the outlook is of deep concern. We wholeheartedly welcome government’s extraordinary package of emergency support for businesses and workers, but this must get through to businesses now.

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“If we’re to keep this sector alive and in a position to help Britain get back on its feet, we urgently need funding to be released, additional measures to ease pressure on cashflow and clarity on how employment support measures will work.”

Many vehicle manufacturers, parts suppliers and engineering firms based in the UK have pledged their support to helping sustain the NHS through the Covid-19 outbreak, offering to build medical ventilators, maintain emergency vehicles and transport key workers.