UK car output falls by nearly half in August

FILE PHOTO: Bentley cars go through final quality control as they come off the production line at their factory in Crewe, Britain January 22, 2019. REUTERS/Phil Noble/File Photo GLOBAL BUSINESS WEEK AHEAD

LONDON (Reuters) – British car production fell by an annual 45% in August as the sector continues to suffer due to the COVID-19 pandemic pushing down demand, an industry body said on Friday.

British factories churned out 51,039 cars last month, leaving output in the first eight months of the year down by nearly 350,000 compared to the same period in 2019, the Society of Motor Manufacturers and Traders (SMMT) said.

“Companies are bracing for a second wave with tighter social and business restrictions making the industry’s attempts to restart even more challenging,” said SMMT Chief Executive Mike Hawes.

August 2019 had been a stronger-than-normal month as some carmakers did not undertake their annual summer shutdowns, having brought them forward to prepare for the original Brexit date at the end of March.

This year, output looks set to fall by around a third to just under 885,000 vehicles, according to the SMMT.

The industry, Britain’s biggest exporter of goods, is also facing the challenge of tumbling demand for diesel models, of electrifying model line-ups and handling potential disruption to trade resulting from Brexit.

London and Brussels are trying to negotiate a free trade deal to come into force in January as Britain leaves EU mechanisms such as the single market and customs union.

“A ‘no deal’ scenario would be disastrous, with car volumes potentially falling below 750,000 by 2025, hampering sector efforts to drive investment into the new skills, facilities and technologies that will be integral to delivering a zero-carbon future,” said Hawes.

Reporting by Costas Pitas; editing by Stephen Addison

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