'Green shoots': UK car production accelerates 5% in April

Peter Campbell
An employee fits parts to the passenger doors of new Nissan automobiles as they travel along the production line at Nissan Motor vehicle assembly plant in Sunderland, U.K.
Chris Ratcliffe | Bloomberg | Getty Images

British car plants have seen a 4 per cent fall in output so far this year amid falling sales at home, in spite of a small production rise during April.

UK car production in April rose by 5.2 per cent to 127,952 cars, but over the first four months remains down 3.9 per cent at 568,378, caused by a sharp fall in UK sales and falling exports, the Society of Motor Manufacturers and Traders said on Thursday.

The small boost last month was compared to a sharp fall in April a year ago, which was caused by a large drop in sales as well as the timing of the Easter bank holiday.

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April also saw several plants increase output with new models coming on, such as the Nissan Leaf. Mike Hawes, SMMT chief executive, said, "While April's growth isn't altogether surprising given the significant decline in output this time last year, it is good to see earlier planned investment into new models delivering results.

"However, given such investment was made on the basis of the free and frictionless trade afforded by our EU membership, the ability of UK plants to attract the next wave of new models and drive future growth depends upon maintaining these competitive conditions after Brexit.

"That's why it is critical that government acts to safeguard our participation in the EU customs union and single market."

More than 80 per cent of UK-made cars are exported, while the industry is also heavily reliant on imported parts.

Some 56 per cent of components used directly in British cars are shipped into the country, while around three quarters of smaller parts used in those components are also imported.

Stuart Apperley, Director and Head of UK Automotive at Lloyds Bank Commercial Banking, said: "These figures mark the first growth in car production since the third quarter of last year, and show that there are some signs of green shoots for the sector.

"But there's no doubt that the major threats that have weighed heavy on the industry in recent months still remain."

Output also closely tracks car sales, both in the UK and in Europe, its largest export market.

British car sales are falling after years of strong growth, but the industry is also warning that confusion over government policies towards diesel is deterring some buyers.

While Chris Grayling, transport secretary, previously told customers to "think twice" before buying a diesel, earlier this month, Greg Clark, business secretary, said that the fuel was the best option for customers who live in the countryside or drive long distances.

"There is a place for diesel vehicles and there will be for some time to come," he told the Financial Times Future of the Car summit in London.

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