A new period of Brexit ‘limbo’ does not end the havoc for industry, the Society of Motor Manufacturers and Traders said.
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Car production has fallen for the 10th month in a row amid warnings that Brexit is undermining Britain’s reputation as stable for business.
Around 126,000 cars were built in March, down by 14% on the same month last year, said the Society of Motor Manufacturers and Traders (SMMT).
Manufacturing for the home market dropped by 18%, and by 13% for overseas customers, driven by soft demand in Asia and Europe.
The latest independent production forecast said that if there is a favourable Brexit deal and transition period maintaining the status quo, UK car production could be 1.36 million units in 2019, down from 1.52 million in 2018, before rising to 1.42 million by 2021, said the SMMT.
But if Britain crashes out of the EU and falls back on World Trade Organisation rules for a sustained period, output is forecast to fall around 30% on recent levels to 1.07 million units by 2021, a level consistent with the “dark days” of the mid-1980s, the society warned.
SMMT chief executive Mike Hawes said: “Despite the extension, the Brexit clock is still ticking and a devastating no deal remains a threat.
“This new period of limbo does not end the havoc for industry, with investment stopped and expensive factory shutdowns moved to avoid a Brexit deadline that has itself now moved.
“Just a few years ago, industry was on track to produce two million cars by 2020 – a target now impossible with Britain’s reputation as a stable and attractive business environment undermined.
“All parties must find a compromise urgently so we can set about repairing the damage and diverting energy and investment to the technological challenges that will define the future of the global industry.”
Alan Jones is Press Association Industrial Correspondent.