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The grim state of the UK car industry in one chart

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
Britain's Prince William helps fit an airbag to a McLaren car. Photo: REUTERS/Chris J. Ratcliffe/Pool

UK car production continued to nosedive in July, according to official figures, with the auto-manufacturing lobby describing the slump as “a serious concern.”

Manufacturing output fell by 10.6% in July to 108,239, according to the Society of Motor Manufacturers and Traders (SMMT), marking the 14th straight month of decline. The slump is now worse than the one suffered at the height of the financial crisis and marks the longest period of decline in UK car manufacturing since 2001.

The ongoing trade war between the US and China, as well as a general global economic slowdown, have hit demand overseas for British-made cars. Brexit-driven factory shutdowns earlier this year have also hit production levels.

SMMT's graph showing the slump in car output. Photo: SMMT

“Another month of decline for UK car manufacturing is a serious concern,” Mike Hawes, the chief executive of SMMT, said in a statement.

“The sector is overwhelmingly reliant on exports and the global headwinds are strong, with escalating trade tensions, softening demand and significant technological change.”

Total UK car production so far this year was down 18.9%, according to figures from the SMMT, with exports down by just over 20%. Exports represent eight in 10 cars built in the UK.

Hawes called for a resolution to Brexit to help car makers battle the tough market conditions.

“With the UK market also weak, the importance of maintaining the UK’s global competitiveness has never been more important so we need a Brexit deal – and quickly – to unlock investment and safeguard the long term future of a sector which has recently been such an international success story,” Hawes said.

Hawes has warned in the past that a no-deal Brexit poses an “existential threat” to the UK car industry, which relies on a steady stream of parts arriving from the continent.

Car manufacturers including Jaguar Land Rover and BMW shut down production earlier this year around the time of the original Brexit date of 29 March to avoid disruption, explaining some of the decline.