UK car production fell during September as confidence was hit by Brexit uncertainty, according to a major car industry body.
Plans to improve air quality also added to the decline in car output, the Society of Motor Manufacturers and Traders (SMMT) said. A 14% fall in demand in the UK market drove the overall drop, it said.
Mike Hawes, SMMT chief executive, said: “With UK car manufacturing falling for a fifth month this year, it’s clear that declining consumer and business confidence is affecting domestic demand and hence production volumes.” Hawes continued: “Brexit is the greatest challenge of our times and yet we still don’t have any clarity on what our future relationship with our biggest trading partner will look like, nor detail of the transitional deal being sought”.
Hawes also commented, “uncertainty regarding the national air quality plans also didn’t help the domestic market for diesel cars, despite the fact that these new vehicles will face no extra charges or restrictions across the UK.”
UK car output fell more than 4% to 153,224 vehicles in September. Production also fell in April, May, June, and August. Domestic demand dropped 14.2% to 31,421 units in September, contributing to an overall year-to-date production decrease of 2.2%.
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Toyota has urged the UK government to lift the “fog” around Brexit negotiations, to safeguard the competitiveness of the Japanese carmaker’s factories in the country.
The drawn-out process surrounding Britain’s plan to leave the EU was creating “a lot of uncertainty”, Didier Leroy, executive vice-president at Toyota, said earlier this month, warning that an inability to secure free access to the European market could prompt the carmaker to reconsider the future of its Burnaston plant in the UK.
Toyota announced earlier this year, plans for a £234m investment to upgrade the plant near Derby in the English Midlands, which has an output of 180,000 cars per year including Auris hatchbacks and Avensis saloons. This plan is being supported by a £21.3m loan from the UK government, which pledged to do all it could to maintain the competitiveness of Britain’s automotive sector in the wake of last year’s vote to leave the EU. Toyota also produces engines at Deeside in Wales.
Mr Leroy said Toyota had done its share by investing in Burnaston to make it more competitive and was still focused on keeping jobs in the UK for the long-term, but now the government needed to pull its weight.
“The UK government should also understand that we cannot stay in this kind of fog when we don’t know what will be the output of the negotiation. And as quick as we can get clarity on that, better will be the way we can prepare for the future,” Mr Leroy added.
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Four projects across five locations in the West Midlands have been awarded £51m in funding to fully test the latest Connected and Autonomous Vehicle (CAV) technology.
The funding will be used to upgrade testing infrastructure for the new technology.
HORIBA MIRA in Nuneaton will build a new site alongside its existing vehicle test tracks where automated vehicles can be tested at the limits of their speed and handling to ensure they are safe. Millbrook Proving Ground in Bedfordshire and Remote Applications in Challenging Environments (RACE) based in the Culham Science Centre in Oxfordshire will set up a range of different test areas mimicking increasingly realistic city driving environments, where automated vehicles can be tested before being taken onto public roads.
Collectively, the projects represent a total of £80m co-investment by industry and government through Meridian; a partnership between the Centre for Connected and Autonomous Vehicles (CCAV), Automotive Council and the Advanced Propulsion Centre – with the £51m from government. All the CAV projects will be fully operational and advancing technology development in this sector within the next 18 to 24 months.
The Trusted Intelligent Connected Autonomous Vehicle consortium – known as TIC-IT is being led by HORIBA MIRA, in partnership with Coventry University. Dr Geoff Davis, Chief Strategy Officer at HORIBA MIRA said: “Not only does CAV technology bring huge benefits to society, but it also creates substantial opportunity for inward investment. In order to turn this opportunity into reality, the UK must accelerate the development, deployment and commercialisation of CAV technology; something we are delighted to be supporting with the development of TIC-IT.”
Paul Noon, Pro-Vice-Chancellor for Enterprise and Innovation at Coventry University, said: “It is very encouraging that government supports our view that collaboration between academia and industry is vitally important. We have long standing links with HORIBA MIRA and our combined expertise is driving innovation as well as boosting skills and knowledge within the burgeoning intelligent transport sector. We are excited to be working with HORIBA MIRA once again on the new TIC-IT project.”
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The UK’s specialist, low volume car manufacturing industry is set to enjoy a 60% production boost by 2020, thanks to increasing global demand – but all could be lost if Brexit talks fail to deliver safeguards.
The manufacturers – which include Warwickshire-based Aston Martin and Coventry’s London Electric Vehicle Company (formerly London Taxi Company) said that unless the industry receives the political support to deliver a competitive environment then the strong potential may be lost. They said what was needed was a future relationship with the EU that safeguarded as many of the current benefits of membership as possible.
In its latest UK Specialist Car Manufacturers Report, trade body the Society of Motor Manufacturers and Traders confirms Britain is home to the largest and most diverse specialist car manufacturing sector in the world, being a global leader in engineering, design and craftsmanship, producing a wide range of cutting-edge products, from high performance sports cars, luxury grand tourers and SUVs, to electric taxis and wheelchair accessible vehicles, including some of the most globally recognised and iconic brands.
Latest figures show that in 2016 these car makers turned over a collective £3.6bn, up 52% from 2012. In addition, they employed 11,250 people – an 11.5% increase on five years ago – the majority in highly skilled, specialist roles, while also supporting tens of thousands additional jobs across the supply chain.
The sector is an important contributor to the UK economy, with 65% of the vehicles it produces exported to markets worldwide, including the EU, United States, China, Japan and the Gulf States. It supports an equally diverse UK supply chain, sourcing, on average, two thirds (65%) of vehicle content from local tier one companies and a further 30% from across the wider EU.
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Vauxhall is cutting about 400 jobs at its Ellesmere Port car plant due to falling sales. The carmaker, now owned by France’s PSA Group – maker of Peugeot and Citroen – is “facing challenging European market conditions,” a spokesman said.
Ellesmere Port, which makes the Astra models, will move staff from two production shifts to one in early 2018. PSA said that manufacturing costs at Ellesmere were higher than other “benchmark plants” in the group.
Vauxhall currently employs about 4,500 people in the UK, with about 1,800 at Ellesmere Port. The company also has a factory at Luton, which makes vans.
PSA became Europe’s second biggest carmaker after Volkswagen in August when it completed the purchase of Vauxhall and German brand Opel from US car giant General Motors. UK Prime Minister Theresa May personally sought assurances from PSA chief executive Carlos Tavares during a phone call in February.
Last month, Mr Tavares said it was hard to decide upon the group’s strategy for Vauxhall given a lack of clarity over the UK’s plans to leave the European Union.
A Vauxhall spokesman said the move from two shifts to one was nothing to do with Brexit uncertainty, but was about maintaining competitiveness in a changing industry.
The spokesman said there will be a new-generation Astra model in the early 2020s, so Vauxhall wanted to make Ellesmere Port more productive so it can get this car contract.
PSA’s recent statement suggested there would no decision until Brexit uncertainty had cleared. “Once PSA has enough visibility on the future trading relationship with the EU, and the plant competitiveness has been addressed, the company will be in a position to consider future investments.”