UK car production seen flat in 2014 as November exports weaken

Friday, Dec 19, 2014

British car production will remain flat in 2014, an industry body said on Thursday, as a drop in exports due to weak foreign demand saw output fall in November.

Overall production fell year-on-year by 0.2 per cent last month to 137,347 cars. Exports, which account for around four in five of all British-built models made, were down 6 per cent, whereas domestic demand rose by nearly a third.

November's drop, the fourth month in a row that output has failed to match last year's equivalent figures, leaves British car production down 0.3 per cent in the first eleven months of the year.

The trend prompted the Society of Motor Manufacturers and Traders (SMMT) to say production would not meet an industry forecast of 1.59 million for 2014, leaving output roughly unchanged from the 1.5 million cars built last year. The SMMT had said last month the forecast was unlikely to be achieved.

"Model changes and economic uncertainty in export markets have flattened UK car production, but the industry remains in a strong position with growth expected to return next year," SMMT Chief Executive Mike Hawes said in a statement.

The SMMT still believes production levels will rise year-on-year from 2015 reaching an all-time high of over 2 million by 2017, beating the previous record set in 1972.

Export demand has been weak in 2014 with only a fragile economic recovery in mainland Europe and car sales plunging in Russia, Britain's second-biggest non-EU export market in 2013.

Model changes have also impacted with Japanese carmaker Honda, which built one in 10 of Britain's cars last year, saying in the autumn that output fell as it switched from its 2014 Civic hatchback and CR-V Sports utility vehicles to new 2015 versions.

Strong demand in Britain, however, has helped bolster the wider European industry with domestic sales expected to reach their highest level in a decade this year, boosted by cheap credit.


Source :