Automotive manufacturing within the UK fell by 20.6% year-on-year in September, marking a big decline as producers refocus their operations on electrical autos (EVs) and face shrinking export volumes.
Based on information from the Society of Motor Producers and Merchants (SMMT), output for each home and export markets dropped considerably, with manufacturing for the UK market falling by 20.8% and exports declining by 20.6%.
September 2022 had been a very sturdy month for UK automotive manufacturing, the perfect since 2020, making the year-on-year comparability extra pronounced. Regardless of the September decline, manufacturing for the UK market has grown by 6.5% within the yr to this point. Nonetheless, this has been offset by a pointy 14.4% drop in exports, leading to an general year-to-date manufacturing decline of 10.2%, with 592,862 models produced thus far in 2024.
Abroad markets hit onerous
The decline in export volumes has been felt throughout a number of key abroad markets. Shipments to China, one of many UK’s main automotive export locations, dropped by 23.1% in September because the nation grapples with an financial slowdown. Whereas China’s GDP grew by 4.6% within the third quarter of 2024, this was under the federal government’s 5% goal, impacting demand for imported items akin to autos. In response, Beijing has just lately launched measures geared toward bolstering progress on the earth’s second-largest financial system.
Exports to the EU, the UK’s largest export marketplace for automobiles, additionally suffered, dropping by 28.6% in September to 26,825 models. This sharp fall in shipments to the EU coincides with weaker automotive gross sales throughout the bloc. Based on the European Car Producers’ Affiliation, EU automotive gross sales fell by 18.3% in August, the bottom in three years, with main markets like Germany, France, and Italy experiencing double-digit declines.
Nonetheless, there was a vivid spot within the US market, the place exports from the UK rose by 24.6% to eight,210 models in September, accounting for 16% of complete UK automotive shipments.
Shift to electrical autos
The autumn in manufacturing has been largely attributed to carmakers retooling their factories to deal with the manufacturing of electrical and hybrid autos, a shift pushed by the UK’s objective of phasing out inside combustion engine autos by 2030. Almost a 3rd of all automobiles produced within the UK in September have been both battery electrical, plug-in hybrid, or hybrid fashions, reflecting the trade’s transition towards greener applied sciences.
Mike Hawes, chief government of the SMMT, described the manufacturing declines as “short-term” and anticipated, however burdened that the automotive trade requires “the necessary industrial and market conditions” to stimulate progress. Hawes known as on the federal government to make use of the forthcoming Autumn Funds and industrial technique to bolster enterprise confidence, entice funding, and safe the competitiveness of the UK’s automotive sector.
Sustaining the UK’s manufacturing stronghold
Regardless of the manufacturing slowdown, the automotive trade stays the UK’s largest exporter of manufactured items. The sector elevated its share of complete exports to 13.9% within the first half of 2024, underlining its significance to the UK financial system. As producers proceed to pivot in direction of zero-emission autos, they’ll rely closely on supportive authorities insurance policies and funding to take care of their world competitiveness and meet the rising demand for electrical automobiles.
