Similar to other major car markets, the UK is experiencing a significant decline in both auto sales and production. With the looming uncertainty brought about by Brexit, things could potentially get worse. Total auto production in the UK for next year is expected to be just shy of a million units, or around half of what the industry had expected to make.
For October, UK vehicle production dropped by 4 percent. According to data published on Thursday by the UK Society of Motor Manufacturers and Traders (SMMT), car production in the country has declined for 16 months straight.
Since the start of the year, UK auto production has dropped by a total of 14 percent when compared to last year. Based on past data, the country is expected to produce roughly 1.3 million cars this year. Meanwhile, sales are expected to drop by 4 percent in total for 2019.
SMMT's chief executive, Mike Hawes, mentioned in a statement that the continually declining auto production numbers in the country have caused major concerns in the sector. Official data has only served to confirm more "worrying times" for the UK's auto industry, which is slowly losing its global competitiveness.
Auto sales in the country have also continued to fall over the past months, but the overall slump in production is much more concerning to industry players. Experts have mentioned that the current state of the country's auto industry can be mostly blamed on the nearly three and a half years of uncertainty over Brexit.
Britain's exit from the European Union could cause severe difficulties in trading with EU members. An exit without a trade deal in place could also make matters even worse as tariffs will likely result in a further decline of production. According to the SMMT, such a scenario would force automakers to shift their production to other countries. Worse-case estimates will likely have the UK produce less than 1 million vehicles per year by 2024.
Global automotive manufacturers have already expressed their concerns about a possible exit without a trade deal. Most companies have already prepared contingency plans for such a scenario as it could negatively affect their supply chains and disrupt production. While there might still be a chance to break the Brexit stalemate during the upcoming general election in December, most automakers are not taking the risk.
Companies such as Honda and Nissan have already announced plans to shut down manufacturing facilities in the UK. Honda is planning to shut down its major factory in England, which employs 3,500 workers. Nissan on the other hand previously scrapped plans to build its new X-Trail SUV in Sunderland.
