UK Car Production Adjusts for New Models Leading to a March Decline
UK Car Production Overview
The UK car production in March saw a decline of -27.1% year-on-year to 59,467 units as reported by the Society of Motor Manufacturers and Traders (SMMT). This drop was anticipated as manufacturers recalibrate their factories to produce the next generation of cars, particularly electric vehicles, resulting in fewer volumes for existing models. The adjustment was also influenced by the shorter working days in March due to the early Easter bank holiday.
Local vs. Export Production
Domestic car production decreased slightly by -0.3% to 19,995 units, while export production plunged -35.9% to 39,472 units. Notably, a majority of cars produced in March were destined for international markets. The European Union accounted for 57.9% of exports, followed by the US, China, Australia, and Japan.
Electrified Vehicle Production
Electrified vehicles, including battery electric, plug-in hybrid, and hybrid models, made up 38.4% of total production with 22,865 units rolled out. However, this segment also experienced a -29.7% decline due to the ongoing model transitions.
UK Car Production Outlook
Despite the decrease in March, Q1 2024 saw a 1.1% increase in UK car production, totaling 222,371 units. The local market witnessed a significant growth of 33.9%, offsetting the -7.4% decline in exports. The majority, 72.7%, of cars produced in Britain were meant for foreign markets in the first quarter.
Expert Insights
Mike Hawes, SMMT Chief Executive, acknowledged the shifts occurring in UK car manufacturing, emphasizing the need for a strong commitment to competitiveness and sustainability. He highlighted the importance of securing trade deals, reducing energy costs, and upskilling the workforce to attract more investments and drive productivity in the industry.
Future Projections
An independent Production Outlook report projects a -6.2% drop in UK car and light van production this year, mainly due to model transitions, before a return to growth in 2025. Output is foreseen to surpass a million units post-2026, with a focus on expanding EV production across the UK.
Conclusion
The UK car production landscape is undergoing significant transformations to align with the rise of electric vehicles and changing market demands. While short-term fluctuations are expected, the industry remains optimistic about future growth and sustainability.
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FAQ
1. Why did UK car production decline in March?
UK car production fell in March due to manufacturers adjusting their factories for the production of new models, particularly electric vehicles, and winding down volumes of existing models.
2. Which were the top export markets for UK cars in March?
The European Union received the majority of UK car exports in March, accounting for 57.9%, followed by the US, China, Australia, and Japan.
3. What is the outlook for UK car production in the coming years?
An independent report forecasts a temporary decline in UK car production in 2024 due to model changeovers, with a return to growth in 2025. The industry aims to exceed a million units post-2026, focusing on expanding electric vehicle production.
