Political Turmoil Slows U.K. Car Build for Export

Rising domestic demand was not enough to maintain growth as U.K. car production fell 2.9% year-on-year in February to 129,915 units.

The Society of Motor Manufacturers and Traders says domestic orders jumped 21.1% to 33,813 units, but the gain was not enough to offset a 9.2% drop in export demand to 96,102.

The U.K. build was down 2.0% at 257,300 units two months into the year with the domestic order book up 20.4% at 64,176 and the export side down 7.8% at 193,124.

Still, SMMT CEO Mike Hawes says the outlook for the car-manufacturing sector continues to be upbeat after a steady performance to start the year.

“The U.K.’s appetite for British-built cars has consistently grown, with the number of cars produced for the home market increasing 51.9% since 2011,” Hawes says in a statement.

“However, political instability abroad has hit certain export areas which will invariably have a small impact on total output.”

Meantime, Hawes says the government’s latest budget underlines the importance of automotive to U.K. economic growth.

“The £100 million ($147 million) injection into connected car research, development and testing – to be matched by industry – will provide a vital boost to the U.K. automotive industry and put us ahead in the global race to build the cars of the future,” he says.

The investment will focus on enhancing the development of driverless-car technology and the systems required to implement and adopt the technology, such as telecommunications.

The SMMT also says the government has recognized China’s importance to the industry by doubling U.K. Trade & Investment Dept. funding for exporters to that market.

China now is the U.K. automotive industry’s biggest export market with sales of British-built cars rising sevenfold in the past five years.

“This funding will help us to further capitalize on this opportunity and strengthen the significant work SMMT is doing to grow the U.K. automotive presence in China,” Hawes says.