U.K. Car Production Plunges at Quickest Rate Since 2008-09 Recession
British automotive production dropped in 2019 at the quickest rate since the 2008-9 recession, hit by slumping exports and diesel demand, as an industry body referred to as an ambitious post-Brexit trade agreement to protect the industry.
Investment, nevertheless, nearly doubled to 1.1 billion pounds ($1.5 billion) due to a decision by Jaguar Land Rover to develop electric vehicles in Britain.
Production dropped by 14.2% to 1.3 million vehicles in 2019, the third consecutive drop, further hit by some auto manufacturers closing factories for additional days in case of Brexit-associated disruption, based on the Society of Motor Manufacturers and Traders (SMMT).
The global industry has been blown by declining sales in vital nations such as China, the world’s greatest autos marketplace, and the need to invest billions in electrical models.
In Britain, exports had been the worst hit with demand down 26.4% from China and 17.7% from Japan.
The UK’s largest exporter of products is now seeking the closest possible tie with the EU, its largest market where over half of the auto exports are sent, avoiding taxes and customs obstacles.
When Britain leaves the EU on January 31, a transition period comes into force for the rest of the year, throughout which time little will change; however, politicians must then negotiate the future collaboration to take effect from 2021.
While production is estimated to fall only marginally this year, a series of investments is due, which will have an effect on future levels.
Peugeot warned in 2019 that a decision to keep open its Ellesmere Port automobile factory in Cheshire relies on Britain’s future ties with the EU.
PM Boris Johnson is keen to use Brexit as an opportunity to improve trade with the U.S., to which 19% of exported vehicles are sent; however, the business is concentrated on maintaining frictionless trade with Europe.