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UK car manufacturing drops 4.6% in November on weakened domestic demand

By Iain Gilbert

Date: Thursday 21 Dec 2017

UK car manufacturing drops 4.6% in November on weakened domestic demand

(ShareCast News) - According to new data compiled by the Society of Motor Manufacturers and Traders (SMMT), British car manufacturing fell 4.6% in November as domestic demand declined.
Although 161,490 new vehicles rolled off production lines in November, only 24,276 were sold to Britons, a 28.1% year-on-year drop driven by crumbling consumer confidence and increased speculation surrounding future government policies toward diesel-powered engines.

Overseas orders grew 1.3% to 137,214 to make up 85% of all car production in the UK, the highest proportion of output seen in 2017.

Mike Hawes, SMMT chief executive, said: "Brexit uncertainty, coupled with confusion over diesel taxation and air quality plans, continues to impact domestic demand for new cars and, with it, production output."

Nearly eight out of ten vehicles produced in the UK were destined for one of 160 global markets, and while export volumes remained stable, domestic production declined 9% year-to-date.

Hawes said: "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."

Alex Buttle, director of car buying at comparison website Motorway.co.uk, said: "This is a stunning fall in domestic demand and pretty much sums up the last six months for an industry reeling from punitive diesel taxes and crumbling consumer confidence.

"The fact that manufacturing levels fell just 4.6% last month, when domestic demand dropped off a cliff, shows just how reliant we are on exports and that's probably more worrying than faltering demand, as right now we have no EU trade agreement and zero clarity over trading agreements with countries outside the EU."

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