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UK Car Production Declines By 8.4% In August 2024 Amid Ongoing Model Transition
UK car production experienced an 8.4% decline in August, as reported by the Society of Motor Manufacturers and Traders (SMMT). This drop equated to 3,781 fewer vehicles, with a total of 41,271 cars produced during this typically low-output month due to summer shutdowns. The decrease continues a year-long trend as factories transition to new models, especially electric ones.
Production for the UK market saw a significant drop of 19.8%, although this was partly due to the small overall output for August. In contrast, exports decreased by only 5.9%, mainly because of model changes for EU markets. The EU remains the largest export destination, accounting for 49.8% of total exports.
Electrified vehicle production, including battery electric and hybrid models, fell by 25.9% in August. This led to a reduced share of total output at 29.6%. However, this decline is expected to reverse as new models are introduced over time.
The US accounted for 17% of exports, followed by China at 6.5%, Japan at 5.1%, and Australia at 4.4%. Notably, there was growth in both the American and Japanese markets for UK car production.
For the year so far, UK car production has decreased by 8.5%, totalling 522,823 units. Despite August's domestic decline, output for the UK market has risen by 12.3%. Mike Hawes, SMMT Chief Executive, noted that August was expected to be quieter due to traditional shutdowns and model transitions.
"With the traditional summer shutdowns and factories prepping to switch to new models, August was always going to be a quieter month for output," said Mike Hawes.
Future Prospects and Investments
The sector remains hopeful about future growth following record investments announced last year. Realising these investments depends on maintaining competitiveness within the UK industry. Upcoming opportunities include the Chancellor’s Autumn budget and government’s Industrial Strategy.
The Labour Party's Automotive Sector Plan could serve as a blueprint with its focus on affordable green energy and skills investment. These measures aim to drive economic growth across the country.
SMMT's Role in the UK Economy
The Society of Motor Manufacturers and Traders (SMMT) is a key trade association representing the UK's automotive industry. This sector contributes significantly to the economy with £93 billion turnover and £22 billion value added annually.
The automotive industry employs around 198,000 people directly in manufacturing and approximately 813,000 across related sectors. Many jobs are outside London and offer wages about 13% higher than the national average.
The industry accounts for 12% of all UK goods exports, generating £115 billion from automotive trade globally. The UK produces various vehicles supported by over 2,500 component providers and skilled engineers.
This sector also supports other industries like advertising, chemicals, finance, logistics, and steel through its vibrant aftermarket and remanufacturing activities.
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