There used to be a time when British drivers would buy a new car because it was built in the UK. Those days are long gone, according to the latest figures from the Society of Motor Manufacturers and Traders (SMMT). Car production in the UK market has dropped by 47% in a year, which means that nine in ten cars that are built in Britain are for export purposes.
The SMMT claims that car manufacturers are facing a “perfect storm,” with fuel economy tests, loss of consumer confidence and tougher emissions. All of these factors are responsible for the drop in June. SMMT representative Mike Hawes said “this is massive by any terms” and the industry was “surprised at the severity” of the decrease.
Hawes also warned that a tariff dispute between Europe and the UK could bring further harm to the industry. “We can’t afford to lose just-in-time production.” He referred to the time-sensitive manufacturing supply chain that could be damaged if car parts are delayed crossing borders.
A major factor for the 47% drop was attributed to the new EU emission tests. The Worldwide Harmonised Light Vehicle Test Procedure (WLTP) was introduced to accurately replicate real driving conditions and give motorists a proper indication of how economical a car can be. The test is also being used to assess emissions and associated tax.
UK car sales are expected to drop by 6% in 2018, following a 5% fall in 2017. In contrast, European sales grew by 2.7% in the first six months of 2018.
Hawes also mentioned that the “cataclysmic fall in consumer confidence” was based on the fall in diesel vehicles. He believed “the death of the diesel is a little premature.” Hawes expected sales to bounce back in September, pointing towards a recovery.