Car production drops for first time in 14 months 0

car-production-drops-for-first-time-in-14-monthsA drop in domestic demand was the main reason for UK car production falling for the first time in 14 months, industry figures revealed.

According to the Society of Motor Manufacturers and Traders (SMMT), 151,795 vehicles were manufactured, a drop of 1% compared to October 2015.

The reason for the drop in production was attributed to past manufacturing for the UK being unsustainable; the drop was anticipated and was unlikely to reflect a slowdown in the economy due to the Brexit vote.

The SMMT said it remained at its highest level since 2005.

The industry body and manufacturers have been more worried about the possible consequences of the referendum on the vital export market.

The SMMT revealed that exports rose for the 15th consecutive month, a total of 122,765 vehicles were built for sale overseas.

The body’s chief executive, Mike Hawes, said: “October’s figures underline the export-led nature of the industry, with eight out of 10 cars built for overseas customers.

“Despite model changes which have ended the consistent growth pattern of the past year or so, we are still on track for a record number of exports.

“Given this dependence on global trade, it is crucial that British-built cars remain attractive to international buyers and exports are not subject to additional tariffs, costs and other barriers to successful trade.

“It is also essential government ensures there is economic stability and a competitive business environment to ensure we continue to attract the global investment that is behind this performance.”

There was widespread relief in Westminster last month after Nissan, which had expressed concerns about the future of its Sunderland plant in the absence of assurances about future policy, confirmed an investment program featuring new models in the North East.

News of the deal pushed both Nissan and the Government to refute suggestions that a ‘sweetheart deal’ had been agreed to satisfy the Japanese company’s concerns.

Other large car manufacturers, including the UK’s largest producer Jaguar Land Rover, have demanded equal treatment across the board. The situation was made more confusing on Wednesday, when it was revealed the Government were not disclosing the finer details of the financial promises it had made to Nissan, to the Office for Budget Responsibility ahead of the Chancellor’s autumn statement.

The Government has reiterated there are no liabilities regarding its assurances “as it currently stands” but it would not say whether this will change once Britain exits the EU.

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