LONDON: Demand from British motorists for UK-built cars has gone off a cliff, plunging by more than a quarter as confusion over diesel and Brexit-related economic worries hit.
Official data on the number of cars rolling off production lines in Britain revealed a collapse in the amount destined for UK drivers, with the number falling by 28.1pc in November on a year-on-year basis. Of the total 169,247 cars built in the UK in the month, just 24,276 were destined to hit domestic roads.
Mike Hawes, chief executive of trade body the Society of Motor Manufacturers and Traders (SMMT) which collated the numbers, blamed the crash on “Brexit uncertainty, coupled with confusion over diesel taxation and air quality plans”. He added that sales of new cars in the UK highlighted the problem. November’s registrations of new cars data – which does not account for where a vehicle was built – recorded a 11.2pc drop.
In the Budget last month Chancellor Philip Hammond announced the introduction of a levy on new diesel cars as part of a plan to improve air quality, with the income from the change used to fund green measures.
However, the car industry hit out at the scheme, saying it only fuelled drivers’ worries about diesel, which manufacturers say has been unfairly “demonised” by government.
They added the Budget measure only affected new vehicles which have the latest engines meaning they are as clean as petrol cars. The charge did nothing to tackle older and more polluting diesel-powered vehicles already on the roads, they argued.
November’s registration figures showed a 30.6pc drop in sales of diesel cars. The latest manufacturing data revealed the number of cars heading for foreign markets rose, up 1.3pc to 135,502. The rise underlines the importance of export sales to Britain’s car sector, with 85pc of cars built here now ending up abroad – five percentage points higher than at the same point a year ago.
Car makers have been one of the most vocal groups arguing for a tariff-free trade deal as part of the Brexit negotiations. The industry has calculated standard World Trade Organisation tariffs and customs barriers would cause a £1,500 price hike on the cost of an imported car and result in a £4.5bn hit to Britain’s £77.5bn a year automotive sector.
Mr Hawes added: “Whilst it is good to see exports grow in November, this only reinforces how overseas demand remains the driving force for UK car manufacturing. Clarity on the nature of our future overseas trading relationships, including details on transition arrangements with the EU, is vital for future growth and success.”
November’s plunge in UK demand for domestically-built cars is the biggest since September 2011, when the automotive market was still reeling from the impact of the financial crisis and central banks were pumping billions into the global economy to try to stave off another crisis.
