UK car production dropped by 13.7 percent in June compared to a year earlier — the third consecutive month of falling output.
The industry trade body, the Society of Motor Manufacturers and Traders (SMMT), said domestic car manufacturing is at risk of missing its target of producing 2m vehicles a year by 2020.
Alongside a drop in domestic demand, the SMMT said uncertainty surrounding the UK’s departure from the European Union (EU) meant less investment in the car industry.
In the first six months of 2017, the number of cars made fell by 2.9 per cent to 866,656, according to the SMMT.
Mike Hawes, the industry body’s chief executive said:
Brexit uncertainty is not helping investment and growth is stalling. The long-held ambition to have 2m cars by 2020 may be in doubt.
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The EU currently accounts for over half — 55 percent — of UK car exports.
“This industry depends on frictionless trade with Europe, it depends on the integrated supply chain with Europe,” Hawes added. “The UK must seek an interim deal which maintains single market and customs union membership until we have in place the complex new agreement sought with the EU.”
A spokesperson for the Department for Exiting the European Union said the government would ensure that the UK continues to be “one of the most competitive locations in the world” for car manufacturing.
The production drop was in line with a decline in UK car sales, which fell 9.5 percent in the first six months of 2017 compared to the same period a year earlier.
While domestic demand is falling, overseas demand for British-built cars has remained steady in the first half of this year, with exports falling just 0.9 percent compared to the same period in 2016.
On Wednesday, the UK government pledged to remove internal combustion engines from new cars and vans by 2040.