Should Britain withdraw from the EU without a deal and rely on WTO rules for a sustained period, UK car production is forecast to fall around 30% on recent levels to 1.07m units by 2021.

This is according to the Society of Motor Manufacturers and Traders (SMMT), which issued the warning as it revealed British car production has fallen for a tenth consecutive month. The figures for March showed a 14.4% decline in car production, with 126,195 units built.

Production for both home and overseas markets declined in double digits, falling 18.1% and 13.4% respectively.

Soft demand in key Asian and European markets was a significant factor, while model changes and a global shift in car segment preferences also contributed to the decline, the SMMT said.

The latest independent production forecast was also published this week, highlighting the varying effects Brexit could have on the industry depending on the outcome of continued negotiations. If discussions go well and the UK withdraws with a favourable deal and transition period, forecasts predict UK car production to be 1.36 million units in 2019. This is down from 1.52 million in 2018, but is expected to rise to 1.42 million by 2021.

However, should Britain be forced to rely on WTO rules in the wake of Brexit, output is forecast to fall by around 30% to 1.07 million units in 2021 – a level consistent with the mid-1980s.

How well do you really know your competitors?

Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.

Company Profile – free sample

Thank you!

Your download email will arrive shortly

Not ready to buy yet? Download a free sample

We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form

By GlobalData
Visit our Privacy Policy for more information about our services, how we may use, process and share your personal data, including information of your rights in respect of your personal data and how you can unsubscribe from future marketing communications. Our services are intended for corporate subscribers and you warrant that the email address submitted is your corporate email address.

“Despite the extension, the Brexit clock is still ticking and a devastating ‘no deal’ remains a threat,” said Mike Hawes, chief executive of SMMT. “This new period of limbo does not end the havoc for industry, with investment stopped and expensive factory shutdowns moved to avoid a Brexit deadline that has itself now moved.

“Just a few years ago, industry was on track to produce two million cars by 2020 – a target now impossible with Britain’s reputation as stable and attractive business environment undermined. All parties must find a compromise urgently so we can set about repairing the damage and diverting energy and investment to the technological challenges that will define the future of the global industry.”