Car production slump continues in May despite factories restarting
The country’s car manufacturers produced a mere 5,314 vehicles in May as output stalled for the second consecutive month due to coronavirus.
New data from the Society of Motor Manufacturers and Traders (SMMT) showed that although two-thirds of the country’s car plants restarted work last month, output was severely curtailed due to social distancing requirements and a lack of demand.
The 95.4 per cent drop in output was a minor improvement from April’s figures, when production flatlined 99.7 per cent, resulting in just 197 cars being built.
In the first five months of the year, just 324,763 cars have rolled off UK production lines, a 41.4 per cent drop on 2019’s numbers.
With English showrooms having not reopened until 1 June, only 1,054 of the cars were built for domestic buyers, with the remainder exported.
The figures come just days after the SMMT warned that one in six automotive jobs would be at risk in the UK if the government did not extend support for the sector.
Over 6,000 jobs have been cut already in June, while a third of all sector workers are still on the government’s job retention scheme, which finishes at the end of November.
Chief executive Mike Hawes reiterated his calls for the government to put together a bespoke package to stimulate the car market and get production rolling again.
“Government assistance so far has been vital in keeping many businesses afloat, but the job isn’t done”, he said.
“Measures to boost cashflow, including additional and tailored finance schemes, tax relief and business rates deferral would deliver immediate results when liquidity is most acute.
“We have to retain the highly skilled jobs the sector provides but also ensure the business conditions are competitive so we can unlock the investment that will drive long-term recovery – a green recovery – which is inextricably linked the sector’s success”.
Speaking at the SMMT’s virtual summit on Tuesday, Ford UK chairman Graham Hoare called on the government to work with the industry on a strategy to hit its target of only selling zero emissions vehicles by 2035.
“We need government to partner with us and have joint equity in formulating and delivering a comprehensive and consistent strategy that encompasses all stakeholders and that provides a path to the future – a path that also encompasses a range of technologies, including mild hybrids, hybrids and plug-in hybrids on the route to zero emissions”, he said
Previously, the government had planned to phase out petrol, diesel and hybrid cars by 2040 as part of its aspiration for the UK to be carbon neutral by 2050.
However, in February Prime Minister Boris Johnson announced that the government would bring forward the ban to 2035.