UK Automotive Production Drops in March as Exports and Supply Issues Persist
March Production Figures and Industry Challenges
Production Decline and Contributing Factors
April 30 (Reuters) - UK automotive production fell 8.2% in March from a year earlier, hit by a slump in commercial vehicle output, parts shortages at a major plant and weaker exports to Asia and the United States, data from a trade body showed on Thursday.
Although the decline eased from February's 17.2% fall, the outlook for the sector remained challenging, the the Society of Motor Manufacturers and Traders (SMMT) said.
External Pressures Impacting the Sector
UK carmakers face mounting pressure as the Middle East conflict threatens to further drive up energy costs and pressure demand, while the European Union's "Made in EU" proposal risks curbing access for UK-made vehicles to parts of the bloc's market.
Detailed Output and Export Data
UK's total auto output in March fell to 72,511 units, with car production down 0.8% at 69,755 and commercial vehicle output down 68.3% at 2,756, the SMMT said.
Export Trends and Market Insights
While exports continued to account for the bulk of output, shipments abroad fell for both cars and commercial vehicles. The European Union remained the UK's largest market, and demand from the bloc rose for a fourth consecutive month, with exports up 4.8% year-on-year.
Industry Response and Trade Concerns
"We must ensure any 'Made in Europe' proposals from the European Commission do not exclude the UK as the two industries are integrated such that both would suffer if the free trade provisions enshrined in the Brexit deal were undermined," SMMT CEO Mike Hawes said.
The SMMT and carmakers have called for clarity on whether UK-built vehicles would be excluded under the EU's latest proposal, warning that uncertainty could weigh on investments as competition from low-cost Chinese electric vehicle makers intensifies.
Economic Impact and Future Outlook
Earlier this month, the SMMT said the annual value of EU-Britain automotive trade was about 80 billion euros ($93.59 billion) and the two sides remain each other's biggest passenger car markets.
"Car production stabilising in March is welcome news for both assembly and the wider supply chain," Hawes said, but warned that geopolitical tensions offer little room for optimism.
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(Reporting by Nithyashree R B in Bengaluru; Editing by Diti Pujara)