Automotive sector “cannot withstand” blow of no-deal Brexit says SMMT

London, UK: The Society of Motor Manufacturers and Traders (SMMT) has warned that the automotive industry cannot withstand the blow of a no-deal Brexit when most commercial vehicles built in the UK are for the European market.

The warning came as new SMMT figures show that UK commercial vehicle production grew 3.6% in July to 5,234 vehicles. The slight increase follows a particularly low volume July 2019, when key model changeovers affected factory output.

Demand from European markets drove the majority of orders with more than half of all units built in July shipped to Europe, helping to grow overall exports by 4.8%. Production for the UK, however, also grew as dealers across England, Scotland and Wales were able to re-open for the first full month to fulfil pent-up demand.

However, the SMMT points out that performance for the year to date tells a different story, with output down by more than a fifth to 31,655 vans, trucks and buses – a combined shortfall of 8,529 units.

Mike Hawes, SMMT chief executive, said: “This month’s increase in output is undoubtedly welcome news, but the uncertainty is far from over. With many production lines running at reduced capacity due to ongoing social distancing measures and order books diminished as a result of depleted business confidence, the industry is still fighting an uphill battle to make up the lockdown loss of more than 8,500 vehicles.

“Already grappling with a pandemic and now a wider economic recession, the automotive industry simply cannot withstand the blow of a no deal Brexit at the end of the transition period. Protecting the relationship with our key trading partner is crucial for the recovery of our deeply integrated sector, particularly when the majority of CVs currently built in the UK are for the European market.”

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