Challenging times ahead after 44.6% August car manufacturing decline

The Society of Motor Manufacturers and Traders (SMMT) saw UK car manufacturing decline by 44.6% in August.

SMMT CEO, Mike Hawes, said that a second wave of the COVID-19 coronavirus restrictions look set to make the industry’s attempts to restart even more challenging with the prospect of Brexit now just 100 days away.

51,039 cars had rolled off UK production lines last month as efforts to ramp-up productivity stalled amid the COVID-19 crisis.

Production YTD is now down by 40.2% with a loss of 348,821 units worth more than £9.5bn to UK carmakers.

SMMT projections suggest that UK car manufacturers are now on-track to produce just below 885,000 cars this year – down 34% on 2019.

Companies need to retain skilled jobs and maintain cashflow and we may need more support to boost business and consumer confidence later this year.

From a new car point of view, Reep have seen a decline in dealer-based volumes since lockdown and a general reduction in new car sales since March 2020. 

Chris McDonald, CEO of Reep Automotive Group, said of the decline: “Most traditional sectors have been massively impacted during the past few months. The UK and Global Automotive Industry have also really felt the pain of reduced volumes of new cars being manufactured.  

We have seen an increase in online/digital sales and whilst demand is down, we also believe that Covid is creating pent up demand which, when things start to return to normal, should also return, but the market will look very different.

We have a senior leadership team who are extremely creative and focused and we will continue to grow and develop our offering despite these times. For our dealership and OEM clients, this is the time to be looking at outsourcing non core business like PPF – that way they can throttle volumes without any long term challenges with staff and payroll.”