UK car production slumped 95% in May despite factories restarting

UK car manufacturers rolled a mere 5,314 vehicles off their production lines in May, despite two-thirds of factories reopening, albeit at reduced capacity.

The hangover from the coronavirus pandemic continues, with UK car production levels falling 95.4% year-on-year in May. With a third of car factories still closed and the rest operating at reduced capacity due to social distancing requirements, as well as a lack of demand, UK car manufacturers produced just 5,314 vehicles last month.

Nevertheless, output in May does represent a slight improvement over April, when just 197 cars were made, the lowest level for any month since February 1946, figures released by the Society of Motor Manufacturers and Traders (SMMT) show.

Notably, Vauxhall’s Ellesmere Port plant and Jaguar Land Rover’s Castle Bromwich plant both remain closed. 

Just 1000 vehicles earmarked for domestic buyers

In the first five months of 2020, just 324,763 cars have been manufactured in the UK, a 41.7% decrease on 2019’s figures.

Furthermore, of the 5,314 cars produced in May, 4,260 were exported, leaving just 1,054 for UK buyers — a reality that highlights how slow domestic sales have been since showrooms reopened on June 1.

In light of the latest figures, the SMMT now projects that fewer than one million cars will be produced in the UK in 2020.

The SMMT says that UK car manufacturers face a number of challenges as they emerge from the COVID-19 lockdown, with liquidity still a major issue for many looking to ramp up operations.

Mike Hawes, SMMT chief executive, said: “May’s figures are yet more evidence of why the UK industry, like its global rivals, needs dedicated support to drive a successful restart. Government assistance so far has been vital in keeping many businesses afloat, but the job isn’t done.

“Measures to boost cashflow, including additional and tailored finance schemes, tax relief and business rates deferral would deliver immediate results when liquidity is most acute. 

“We have to retain the highly skilled jobs the sector provides but also ensure the business conditions are competitive so we can unlock the investment that will drive long-term recovery – a green recovery – which is inextricably linked to the sector’s success.”

With the SMMT also warning that potentially up to one in six car manufacturing jobs is at risk of redundancy when the coronavirus furlough scheme comes finishes at the end of October, an already reeling automotive industry ‘cannot withstand a second shock of a hard Brexit’.