Exports fuel growth in UK car production during April

Output grew for the third consecutive month as supply shortages ease.

By: James Fossdyke

Jun 5, 2023 at 3:10am ET

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The number of new cars built in the UK grew again last month, with exports fuelling the rise in output. According to figures from the Society of Motor Manufacturers and Traders (SMMT), more than 66,500 new cars were built in the UK in April, an increase of around 6,000 on the same month last year.

That 9.9-percent uplift in output represented the third consecutive month of growth for the sector, which appears to be bouncing back from supply shortages seen following the beginning of the coronavirus pandemic.

It comes despite concerns surrounding the impending ‘rules-of-origin’ legislation that’s set to come in on January 1, 2024. The rules, which are part of the Brexit deal, mean a certain proportion of a car’s value will have to come from the UK or EU. If the car does not meet the requirements, it will be subject to tariffs.

The SMMT is particularly concerned about battery-electric vehicles, where the battery represents a significant proportion of the value, and the tariffs that might arise as a result. It’s of particular concern given last month’s growth was fuelled heavily by exports, which grew by 14.7 percent compared with the same month last year.

In contrast, the number of cars built in the UK for British customers was down by 8.3 percent, with just 11,707 new cars constructed for domestic customers. As a result, 82.4 percent of new cars built in the UK last month were exported, up from 78.9 percent in April 2022.

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And the number of hybrid and electric cars built in the UK continues to grow, with combined volumes up 56.2 percent in April. That means almost four in every 10 new cars built in the UK (37.7 percent) are now either hybrid or electric vehicles.

“UK car production is starting to motor again, good news for the sector and the many thousands of jobs and livelihoods it sustains,” said SMMT chief executive Mike Hawes. “These figures also show how exports, particularly to Europe, continue to be the foundation of British automotive manufacturing so we must do all we can to safeguard the competitiveness of these trading relationships. Most immediately, this means finding a solution to the rules of origin challenge faced by manufacturers on both sides of the Channel, else we risk the application of tariffs – and therefore unnecessary cost – on the very vehicles we are trying to encourage consumers to purchase.”